/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/061220.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, December 20, 2006, Vol. 7, No. 252 Headlines A U S T R I A GT TELEKOMMUNICATIONS: Creditors' Meeting Slated for Jan. 10 LTZ - BAUSERVICE: Claims Registration Period Ends Jan. 2 M. S. BACKEREI: Creditors' Meeting Slated for Jan. 17 MDM HOLDING: Sergey Popov Acquires 90% Shareholding in MDM Bank MDM HOLDING: Fitch Affirms Short-Term Rating at B TYROMAR WARENHANDEL: Creditors' Meeting Slated for Dec. 22 B E L G I U M CREDIT PROFESSIONNEL: Fitch Affirms Individual Ratings at C/D C Y P R U S RUSSIAN COMM'L: Fitch Affirms & Withdraws D/E Individual Rating C Z E C H R E P U B L I C ANDREW CORP: Posts US$34.2 Million Net Loss in FY Ended Sept. 30 VALEANT PHARMA: Moody's Cuts Rating to B2 Over Default Notice D E N M A R K SITEL CORPORATION: Earns US$7.4 Million in 2006 Second Quarter F I N L A N D METSO OYJ: Injects EUR15 Million to Raise Paper Unit's Capacity F R A N C E ALCATEL-LUCENT: Soliciting Consents to Amend Sr. Note Indenture ALCATEL-LUCENT: Inks IP Network Contract with Hawaiian Telcom EUROTUNNEL GROUP: French Court Sets Jan. 15 Plan Hearing KB HOME: Planned Restatement Prompts Moody's Ratings Review TK ALUMINUM: Posts EUR22-Mln 3Q Loss; May Breach Bond Covenant TK ALUMINUM: S&P Cuts Rating to CCC- on Possible Covenant Breach VALEANT PHARMA: Moody's Cuts Rating to B2 Over Default Notice VTB BANK FRANCE: Fitch Affirms Individual Rating at C/D G E O R G I A METROMEDIA INT'L: Files 2004 Annual Report with U.S. SEC G E R M A N Y ABR FORMENBAU: Creditors Must File Claims by Dec. 27 ALT HEDDERNHEIMER: Registration of Claims Ends Dec. 27 ANTHRACITE EURO: Moody's Rates EUR25-Mln Class E Notes at Ba2 ARBEITSGEMEINSCHAFT FRANKFURTER: Claims Bar Date Set at Dec. 27 ASAT HOLDINGS: Weak Liquidity Prompts S&P's Junk Ratings BOLAT DIENSTLEISTUNGEN: Creditors Must File Claims by Dec. 27 DAIMLERCHRYSLER: Unit Ordered to Pay US$350MM in U.S. Fraud Case DAS SITZT: Deadline for Submission of Claims Set Dec 27 DOMUS SULTAN: Credit Must Register Claims by Dec. 23 E-MAC DE 2006-II: Fitch Rates EUR3.5-Mln Class F Notes at BB+ EGO ELEKTRO: Claims Filing Period Ends December 27 GELDILUX-TS-2005: Fitch Affirms Low-B Ratings on 6 Note Classes HTE UNTERNEHMENSGRUPPE: Claims Registration Ends Dec. 27 IKB PROMISE-I: Moody's Assigns Ba1 Rating on Class E Notes PS-LEASING GMBH: Creditors Must Register Claims by Dec. 27 QUELLENTHERME SERVICE: Claims Registration Ends Dec. 27 RAHE BAUTEC: Creditors Must File Claims by Dec. 27 SHOPPING-SERVICES 4 U: Claims Registration Ends Dec. 27 TUI AG: Eyes 3,600 Job Cuts at Tourism Division G R E E C E YIOULA GLASSWORKS: Moody's Affirms B3 Rating on EUR140-Mln Notes H U N G A R Y ACTUANT CORP: Earns US$25.2 Million in 2006 Fourth Quarter I R E L A N D AFFILIATED COMPUTER: Identifies US$51MM Addt'l. Non-Cash Expense ELAN CORP: Applies for TYSABRI's Supplemental License with FDA I T A L Y METSO OYJ: Injects EUR15 Million to Raise Paper Unit's Capacity TK ALUMINUM: Posts EUR22-Mln 3Q Loss; May Breach Bond Covenant TK ALUMINUM: S&P Cuts Rating to CCC- on Possible Covenant Breach K A Z A K H S T A N ALEXANDRIT HOLDING: Claims Filing Period Ends Jan. 24, 2007 ALTAISERVICECENTRE LLP: Court Commences Bankruptcy Proceedings BAIMURAT LLP: Kostanai Court Declares Firm Insolvent CINEMA INVEST: Claims Filing Period Ends Jan. 26, 2007 MURAGER LLP: Claims Filing Period Ends Jan. 26, 2007 NEWS-PRINT LLP: Claims Filing Period Ends Jan. 24, 2007 NITS INCOMSYSTEM: Creditors Must File Claims by Jan. 24, 2007 PRINCIP LLP: East Kazakhstan Court Starts Bankruptcy Proceedings STROY-SUPPLY-PLUS 777: Court Starts Bankruptcy Procedure K Y R G Y Z S T A N KYRGYZ SHAMPANY-KAMEKS: Creditors Meeting Slated for Dec. 25 TECHNOLOGY ELECTRONIC: Claims Registration Ends Jan. 5, 2007 L U X E M B O U R G GELDILUX-TS-2005: Fitch Affirms Low-B Ratings on 6 Note Classes NORTEL NETWORKS: Amends US$750 Million Master Facility Agreement N E T H E R L A N D S ALCATEL-LUCENT: Soliciting Consents to Amend Sr. Note Indenture ALCATEL-LUCENT: Inks IP Network Contract with Hawaiian Telcom P O L A N D AFFILIATED COMPUTER: Identifies US$51MM Addt'l. Non-Cash Expense EUROGAS INC: Sept. 30 Balance Sheet Upside-Down by US$41.1 Mln P O R T U G A L COMPANHIA SIDERURGICA: U.K. Regulator May Auction Corus in 2007 R U S S I A ALFA LLC: Perm Court Names A. Osmekhin as Insolvency Manager BRATSKOYE FREIGHT: Court Names S. Galandin as Insolvency Manager CHAINSKOYE CJSC: Court Names Ya. Gomerov as Insolvency Manager LUKOIL OAO: ConocoPhillips to Hike Stake to 20% MDM BANK: Sergey Popov Acquires 90% Shareholding MDM BANK: Fitch Affirms Sr. Unsec. Debt at BB- with Pos. Outlook METROMEDIA INT'L: Files 2004 Annual Report with U.S. SEC MOTORIST OJSC: Rostov Bankruptcy Hearing Slated for Feb. 6 NORTH-METAL CJSC: Court Names S. Kovalev as Insolvency Manager NOVOCHERKASSKIY LIQUEUR-VODKA: Court Hearing Slated for March 5 ORLOVSKOYE OJSC: Court Names V. Volgin as Insolvency Manager POSEVNINSKAYA LLC: Bankruptcy Hearing Slated for January 15 SEL-KHOZ-TEKHNIKA OJSC: Court Starts Bankruptcy Supervision SERDOBSKIY BRICKWORKS: Court Names A. Makarov to Manage Assets SEVERSTAL OAO: Gains RUR24.8 Billion from New Share Issue SEVERSTAL OAO: Appoints Five Non-Executive Directors to Board SLAVINVESTBANK LLC: Fitch Rates US$100-Million Notes at B- VNESHTORGBANK JSC: Eyes US$4.6 Billion Fresh Capital in 2007 IPO VNESHTORGBANK JSC: Fitch Affirms Individual Rating at C/D VNESHTORGBANK JSC: Inks Syndicated Factoring Project with NFC VODOPYANOVSKOYE OJSC: Bankruptcy Hearing Slated for March 15 WEST-URAL CRANE FACTORY: Bankruptcy Hearing Slated for March 19 WOODWORKING FACTORY CJSC: Tomsk Court Names Insolvency Manager WOODWORKING FACTORY OJSC: Court Taps S. Chashin to Manage Assets S P A I N MADRID RMBS II: Fitch Rates EUR18.9 Million Class E Notes at BB+ S W I T Z E R L A N D BALLFIRE LLC: St. Gallen Court Starts Bankruptcy Proceedings BDS FINANCE-SERVICES: Zug Court Closes Bankruptcy Proceedings CW CARAVAN: Berne Court Starts Bankruptcy Proceedings DHMN JSC: Thurgau Court Suspends Bankruptcy Proceedings DREILINDEN LANGENTHAL: Berne Court Starts Bankruptcy Proceedings LANNA GASTRO: Thurgau Court Starts Bankruptcy Proceedings POLYTECH SUISSE: Berne Court Starts Bankruptcy Proceedings TECH DATA: Moody's Rates Proposed US$350-Mln Sr. Notes at Ba2 THEILER SIRNACH: Thurgau Court Suspends Bankruptcy Proceedings TSCHANZ KUCHEN: St. Gallen Court Closes Bankruptcy Proceedings UNTERSEE AUKTIONEN: Court Suspends Bankruptcy Proceedings VERAGUTH-MOTOS LLC: Court Suspends Bankruptcy Proceedings T U R K E Y HABAS SINAI: Low Leverage Prompts Fitch to Affirm B+ Ratings VESTEL ELEKTRONIK: Sound Posture Cues Fitch to Affirm BB- Rating U K R A I N E INDUSTRIALBANK: Fitch Lifts Junk Issuer Default Rating to B- UKRSIBBANK JSCIB: Fitch Assigns BB- Rating to US$500-Mln Notes VNESHTORGBANK JSC: Eyes US$4.6 Billion Fresh Capital in 2007 IPO VNESHTORGBANK JSC: Fitch Affirms Individual Rating at C/D VNESHTORGBANK JSC: Inks Syndicated Factoring Project with NFC U N I T E D K I N G D O M 1ST CALL: Appoints T. Papanicola to Liquidate Assets ACTUANT CORP: Earns US$25.2 Million in 2006 Fourth Quarter ANTHRACITE EURO: Moody's Rates EUR25-Mln Class E Notes at Ba2 BH FURNISHERS: Names Michael C. Klenlen Liquidator BLOCKBUSTER INC: S&P Holds Ratings & Revises Outlook to Stable BURNGREAVE COMMUNITY: Creditors Confirm Liquidator's Appointment COLLINS & AIKMAN: Excl. Plan-Filing Period Intact Until Jan. 12 COLLINS & AIKMAN: Seeks Plan Framework with Customers & JPMorgan CORUS GROUP: Auction Looms If Buyer Remains Unnamed by Jan. 31 CORUS GROUP: Adjourns Meetings Following Regulator's Ultimatum EUROTUNNEL GROUP: French Court Sets Jan. 15 Plan Hearing GEO GROUP: Modifies Financing Plan for CentraCore Purchase REFCO INC: Plan Satisfies 13 Steps for Confirmation, Court Rules SEVERSTAL OAO: Gains RUR24.8 Billion from New Share Issue SEVERSTAL OAO: Appoints Five Non-Executive Directors to Board SITEL CORPORATION: Earns US$7.4 Million in 2006 Second Quarter TRIPLE BLACK: Brings In Joint Liquidators from Ashcrofts UMANO JEWELLERY: Taps Liquidator from BN Jackson Norton VTB EUROPE: Fitch Affirms Individual Rating at C * Fitch Says European Car Makers Better Positioned than US Peers ********* ============= A U S T R I A ============= GT TELEKOMMUNICATIONS: Creditors' Meeting Slated for Jan. 10 ------------------------------------------------------------ Creditors owed money by LLC GT Telekommunications (FN 245522m) are encouraged to attend the creditors' meeting at 9:45 a.m. on Jan. 10, 2007, to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Trade Court of Vienna Room 1606 Vienna, Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Nov. 2 (Bankr. Case No. 4 S 158/06x). Susanne Fruhstorfer serves as the court-appointed property manager of the bankrupt estate. Michael Gunther represents Dr. Fruhstorfer in the bankruptcy proceedings The property manager can be reached at: Susanne Fruhstorfer Seilerstatte 17 1010 Vienna, Austria Tel: 512 57 76 13 Fax: 512 57 76 50 E-Mail: office@fg-lawyers.at LTZ - BAUSERVICE: Claims Registration Period Ends Jan. 2 -------------------------------------------------------- Creditors owed money by LLC LTZ-Bauservice (FN 258082h) have until Jan. 2, 2007, to file written proofs of claims to court- appointed property manager Georg Buder at: Dr. Georg Buder Bethlehemstrasse 3 4020 Linz, Austria Tel: 0732/771877 Fax: 0732/77187718 E-Mail: moerth.buder@utanet.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:00 p.m. on Jan. 15 to consider the adoption of the rule by revision and accountability. The meeting of creditors will be held at: The Land Court of Steyr Hall 7 2nd Floor Steyr, Austria Headquartered in Linz, Austria, the Debtor declared bankruptcy on Oct. 24 (Bankr. Case No. 12 S 91/06d). Walther Morth represents Dr. Buder in the bankruptcy proceedings. M. S. BACKEREI: Creditors' Meeting Slated for Jan. 17 ----------------------------------------------------- Creditors owed money by LLC M.S. Backerei- und Konditorei (FN 237643a) are encouraged to attend the creditors' meeting at 9:30 a.m. on Jan. 17 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Trade Court of Vienna Room 1705 Vienna, Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Aug. 31 (Bankr. Case No. 3 S 121/06y). Herbert Hochegger serves as the court-appointed property manager of the bankrupt estate. Bernhard Eder represents Dr. Hochegger in the bankruptcy proceedings. The property manager can be reached at: Dr. Herbert Hochegger Brucknerstrasse 4/5 1040 Vienna, Austria Tel: 505 78 61 Fax: 505 78 519 E-Mail: office@hoch.co.at MDM HOLDING: Sergey Popov Acquires 90% Shareholding in MDM Bank --------------------------------------------------------------- MDM Bank disclosed of an agreement reached by its owners whereby Sergey Popov becomes the main investor in MDM Bank. He will own a 90% share in the Bank. Martin Andersson, member of MDM Bank's strategy committee, will acquire a 10% stake. Andrey Melnichenko, who has been a 50-50 owner of the Bank together with Mr. Popov, will discontinue his ownership in the Bank as part of a wider re-organization of his interests with Mr. Popov. This reorganization is subject to all relevant regulatory approvals. Mr. Popov has been one of MDM Bank's investors since 2003. As a member of MDM Bank's Board of Directors he was one of the architects of the Bank's strategy and of the development of its corporate governance system. Currently Mr. Popov sits on the Boards of MDM Bank, Russia's largest coal company, SUEK, and a leading agrochemical company, EuroChem. Mr. Andersson, a member of the Bank's Strategy committee since the first half of 2006, is a founding partner of the Brunswick Group. He was CEO and Chairman of Brunswick UBS Warburg, a leading Russian investment bank. About MDM Headquartered in Moscow, Russia, OJSC MDM Bank -- http://www.mdmbank.com/-- provides financial services organized across four divisions: corporate banking, retail banking, and investment banking. The bank owns and operates 100 offices throughout Russia. MDM HOLDING: Fitch Affirms Short-Term Rating at B ------------------------------------------------- Fitch Ratings affirmed Russia-based MDM Bank's and its ultimate parent, MDM Holding GmbH's: * MDM Bank: -- Issuer Default rating and foreign currency senior unsecured debt: affirmed at 'BB-' (BB minus); IDR Outlook Positive. -- Subordinated debt: affirmed at 'B+'. -- National Long-term rating and RUB senior unsecured debt: affirmed at 'A+(rus)'; Long-term rating Outlook Positive. -- Short-term rating affirmed at 'B'. -- Individual rating: affirmed at 'C/D'. -- Support rating: affirmed at '4'. * MDM Holding GmbH: -- IDR: affirmed at 'BB-' (BB minus); Outlook Positive. -- Short-term rating: affirmed at 'B'. -- Individual rating: affirmed at 'C/D'. -- Support rating: affirmed at '5'. The affirmation follows the announcement of an agreement reached by MDM Bank's owners whereby Sergey Popov becomes the main investor in MDM Bank. He will own a 90% share in the Bank. Martin Andersson, member of MDM Bank's strategy committee, will acquire a 10% stake. Andrey Melnichenko, who has been a 50-50 owner of the Bank together with Mr. Popov, will discontinue his ownership in the Bank as part of a wider re-organization of his interests with Mr. Popov. This reorganization is subject to all relevant regulatory approvals. Fitch says that corporate governance improvements at MDM Bank, which have included the gradual withdrawal from the bank's day- to-day management by Mr. Melnichenko, the creation of appropriate committee structures and the formation of an experienced executive team under CEO Mr. Michel Perhirin, should ensure minimal disruption to the bank's business. Mr. Melnichenko is to remain a member of MDM Bank's Board of Directors at present. Fitch understands that MDM Bank's strategy to push more comprehensively into the middle-market retail and SME segments, including in the Russian regions, will not be affected by the ownership change. The change in ownership has been structured largely as an asset swap between the two parties and Fitch has been assured that no leverage is required to effect the transaction. MDM Bank relies very heavily on wholesale sources of funds. Fitch considers that the change in ownership should not materially affect MDM Bank's access to funding, nor its funding costs. However, it is difficult to predict the intentions of the numerous interested parties and it is an area that Fitch will monitor closely. MDM Bank is by far the largest subsidiary of MDM Holding GmbH and is Russia's 10th largest bank by assets. MDM Holding GmbH had consolidated assets of RUB210 billion and consolidated equity of RUB29bn at end-September 2006. Operating return on average equity was 19.5% for first nine months of 2006, a little lower than the 22% achieved in first nine months of 2005, a period that benefited from exceptionally low impairment charges and high trading gains. TYROMAR WARENHANDEL: Creditors' Meeting Slated for Dec. 22 ---------------------------------------------------------- Creditors owed money by LLC Tyromar Warenhandel (FN 43612k) are encouraged to attend the creditors' meeting at 9:15 a.m. on Dec. 22 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: Land Court of Innsbruck Conference Hall N214 2nd Floor Innsbruck, Maximilanstrasse Austria Headquartered in Innsbruck, Austria, the Debtor declared bankruptcy on Oct. 30 (Bankr. Case No. 9 S 27/06d). Stefan Geiler serves as the court-appointed property manager of the bankrupt estate. The property manager can be reached at: Dr. Stefan Geiler Maria-Theresien-Strasse 17-19 6020 Innsbruck, Austria Tel: 0512/58 27 60 Fax: 0512/5827606 E-Mail: office@ullmann-geiler.at ============= B E L G I U M ============= CREDIT PROFESSIONNEL: Fitch Affirms Individual Ratings at C/D ------------------------------------------------------------- Fitch Ratings affirmed Credit Professionnel's ratings at Issuer Default 'A+', Short-term 'F1', Individual 'C/D' and Support '1'. The Outlook is Stable. The Issuer Default, Short-term and Support ratings of CP are based on the extremely high probability of support it could receive from its 100% shareholder, Credit Mutuel Nord Europe group, in case of need. CMNE's stake in CP is held by its issuing vehicle, Caisse Federale du Credit Mutuel Nord Europe (rated 'F1'/'A+'). Thus, CP's Issuer Default rating is equalised with that of its parent. CMNE has stated its willingness to ensure that CP meet its obligations and has provided unlimited, albeit unconfirmed, funding lines to CP. Moreover, expansion into Belgium is a key part of CMNE's strategy, allowing it to expand into a neighbouring region. CMNE can sell products developed in France and adapted to the Belgian market through the eight regional banks of the CP network. Following a reorganization in 2006, CP now has majority control over four regional banks, three of which were previously held directly by CMNE. The other four regional banks are owned by their customers. CP's Individual rating reflects its small size, improved operating profitability, good asset quality and sound capitalization. CP has completed the restructuring it has been undergoing over the past six years, which included staff reduction, overhaul of IT systems and new definitions of management duties. Thus, it continued to record higher operating profit and an improved cost/income ratio in 2005. Initially, the consolidation of four regional banks in 2006 will have a negative impact on CP's cost/income ratio owing to the high cost base of these regional banks. Accordingly, CP will once again enter a restructuring phase to reduce operating expenses, although this time related to the regional banks. Moreover, the regional banks will continue to work on increasing business with and revenue from clients. Thus, over time the CP's consolidated operating profit and cost/income ratio should improve. CP is the central banking organization for the eight regional banks of the CP network and provides services to these banks. Their clientele is primarily composed of self-employed individuals and small businesses. CMNE is a member of the French Credit Mutuel banking group. The CM group is the fourth largest banking group in France and consists of several regional federations, including CMNE. =========== C Y P R U S =========== RUSSIAN COMM'L: Fitch Affirms & Withdraws D/E Individual Rating --------------------------------------------------------------- Fitch Ratings affirmed the ratings of Russia-based JSC Vneshtorgbank and its London-, Paris- and Cyprus-based subsidiaries, respectively VTB Europe plc, VTB Bank France SA. and Russian Commercial Bank (Cyprus), at: * JSC Vneshtorgbank: -- Foreign currency Issuer Default rating: 'BBB+', Short-term foreign currency 'F2', Individual 'C/D', Support '2', National Long-term 'AAA(rus)', Local currency IDR 'BBB+'. The Outlooks on the bank's IDRs and National Long-term rating are Stable. VTB's IDRs, Short-term and Support ratings are underpinned by its majority state ownership, importance to the Russian banking system, and Fitch's view of the high probability of support from the Russian state in case of need. However, the bank's support floor continues to depend on its status, ownership and importance to the Russian banking system. Upside potential for the Individual rating is currently limited given VTB's exposure to political risk, pressured capitalization, transparency issues surrounding the bank's largest credit exposures and increasing operational and credit risks. * VTB Europe plc: -- Foreign currency IDR 'BBB', Short-term foreign currency, 'F3', Individual 'C' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. In light of VTBE's 89%-owner, VTB, which is Russia's second largest, state-owned bank, as well as the comfort letter Fitch understands that VTB has provided to the UK's Financial Services Authority in respect of VTBE (which although not legally binding provides a strong moral obligation to support VTBE), there is a high probability that support for VTBE would be forthcoming from VTB, if needed, flowing ultimately from the Russian state. Fitch does not expect an upgrade of VTBE's Individual rating in the near future. Downward movement could result from failure to offset revenue pressures, a decline in asset quality or an increase in risk appetite. * VTB Bank France SA.: -- Foreign currency IDR 'BBB', Short-term foreign currency 'F3', Individual 'C/D' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. The Issuer Default, Short-term and Support ratings of VTBF reflect Fitch's view of the high probability of support from VTB, if needed, flowing ultimately from the Russian government. This is based on VTBF's 87%- ownerhip by VTB, as well as the assurances provided by VTB to the French authorities in respect of VTBF's solvency and by the Central Bank of Russia (VTBF's former majority owner) in respect of VTBF's liquidity (up until end-2007). Fitch does not expect an upgrade of VTBF's Individual rating in the near future. However, downward movement could result from failure to offset revenue pressures or should VTB channel upstream a large amount of capital from VTBF. * Russian Commercial Bank (Cyprus): Foreign currency IDR 'BBB', Short-term foreign currency 'F3' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. RCBC's Individual rating of 'D/E' is affirmed and withdrawn. RCBC's ratings reflect the high probability of support being forthcoming from its 100% shareholder, VTB, in case of need. Under the terms of RCBC's banking license granted by the Cypriot authorities, its obligations are guaranteed by VTB in the case of RCBC being wound up. However, in light of possible timeliness issues relating to enforcement of the guarantee, and also its cross-border nature, Fitch maintains a one-notch differential between the ratings of VTB and RCBC. The withdrawal of RCBC's Individual rating reflects the extent of integration between RCBC and its parent, which makes an analysis of RCBC on a standalone basis difficult. Fitch is informed that RCBC will remain a direct subsidiary of VTB for the foreseeable future, notwithstanding the ongoing restructuring of VTB's western European subsidiaries. Founded in 1990, VTB is Russia's second-largest bank by assets and equity. Historically a corporate bank, it is also aggressively expanding its domestic small and mid-sized enterprise and retail banking operations. VTB's strategy is to become a mid-sized European bank. Following a number of acquisitions, VTB group comprises three major Russian banks, seven banks in Western Europe, including VTBE and VTBF (both acquired at end-2005) and RCBC, and four banks in CIS countries. It also has offices in Africa and plans to open new offices in Asia. =========================== C Z E C H R E P U B L I C =========================== ANDREW CORP: Posts US$34.2 Million Net Loss in FY Ended Sept. 30 ---------------------------------------------------------------- Andrew Corp. reported a US$34.2 million net loss for the fiscal year ended Sept. 30, 2006, compared with net income of US$38.8 million for fiscal 2005. The loss is primarily due to the US$79 million increase in income tax expense as a result of the recording of a valuation allowance on its U.S. deferred tax assets. Sales for fiscal 2006 of US$2.1 billion increased from US$1.9 billion fiscal 2005. The sales increase resulted from higher sales in Antenna and Cable Products and Base Station Subsystems offset by an expected sales decline in Network Solutions. The company's top 25 customers accounted for 69% of sales in fiscal 2006, 2005, and 2004. In fiscal 2006 and 2005, major OEMs accounted for 39% of sales. No single customer accounted for more than 10% of sales in fiscal 2006. In fiscal 2005, Cingular Wireless accounted for 11% of total sales. Gross profit margins decreased slightly from 22.3% in fiscal 2005 to 22.1% in fiscal 2006 due primarily to higher commodity costs, especially copper, and the expected decrease in Network Solutions margin contribution resulting from the completion of U.S. E-911 upgrade installations. Operating expenses were US$390 million in fiscal 2006, or 18.2% of sales, compared with US$359 million in fiscal 2005, or 18.3% of sales. Operating expenses increased US$30.8 million compared with fiscal 2005 due primarily to higher sales and administrative costs, which increased from 11.4% of sales in fiscal 2005 to 11.9% of sales in fiscal 2006. Research and development expenses increased US$5.1 million in fiscal 2006 versus fiscal 2005, but decreased as a percentage of sales from 5.5% in fiscal 2005 to 5.3% in fiscal 2006. Sales by Major Geographic Region Sales in the Americas increased 6% in fiscal 2006 compared to fiscal 2005 due to strong growth in antenna and cable products, power amplifiers and filter sales which were offset by sales decreases in geolocation equipment and satellite products. Europe, Middle East, and Africa sales increased 8% in fiscal 2006 compared to fiscal 2005 due to strong Antenna and Cable Group sales, primarily resulting from the acquisition of Precision Antenna Ltd., offset by lower Base Station Subsystems Group sales. Asia Pacific sales increased 28% in fiscal 2006 compared to fiscal 2005 due to increased Antenna and Cable Group sales, primarily in India, Indonesia, and China. With the anticipated issuance of 3G licenses in fiscal 2006, Chinese operators slowed their investment in wireless infrastructure in fiscal 2005. Gross Profit Gross profit as a percentage of sales was 22.1% in fiscal 2006 and 22.3% in fiscal 2005. Two of the more significant factors driving the margin decrease were the company's changing product mix and increased commodity costs. Over the last three years, Andrew's gross profit percentages have changed as its product offering has evolved from primarily passive components to complete system solutions, including more active electronic components. Additionally, higher margin geo-location sales have decreased over the past three years as U.S. service providers have implemented and completed E-911 upgrade installations. In fiscal 2006, the company used approximately 70 million pounds of copper. The company's average cost per pound of copper increased by approximately US$0.45 throughout fiscal 2006, resulting in an increase in cost of products sold of approximately US$32 million or 1.5% of sales. In addition, in fiscal 2005, product recall costs associated with one of the company's Base Station Subsystem products resulted in a charge of US$17 million or 0.8% of sales. Liquidity and Capital Resources In fiscal 2006 the company had cash flow from operations of US$91.8 million. Cash and cash equivalents were US$169.6 million at Sept. 30, 2006, a decrease of US$19.2 million from Sept. 30, 2005. Working capital was US$585 million at Sept. 30, 2006, compared with US$639 million at Sept. 30, 2005. The company's balance sheet at Sept. 30, 2006, showed total assets of US$2.4 billion, total liabilities of US$900 million, and total shareholders' equity of US$1.5 billion. A full text-copy of the company's annual report on Form 10-K may be viewed at no charge at http://ResearchArchives.com/t/s?1729 Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ:ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries including Italy and Czech Republic, among others. * * * As reported in the Troubled Company Reporter, Standard & Poor's Ratings Services revised its CreditWatch implications on Andrew Corp. to negative from developing. The 'BB' corporate credit rating and other ratings on the company were placed on CreditWatch developing on Aug. 7. VALEANT PHARMA: Moody's Cuts Rating to B2 Over Default Notice ------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of Valeant Pharmaceuticals International to B2 from B1, and kept Valeant's ratings under review for possible further downgrade. Moody's initially placed the ratings under review for possible downgrade on Oct. 23, 2006. This rating action follows the company's recent announcement that the trustee for the holders of its 3% convertible notes due 2010 has declared a notice of default related to Valeant's late filing of its Form 10-Q for the quarter ended Sept. 30. According to the indentures governing US$300-million of Valeant's senior notes, US$240 million of convertible notes due 2010 and US$240-million of convertible notes due 2013, failure to file timely SEC reports constitutes a covenant violation. If the trustee or holders of 25% of the respective series of notes or convertibles declares a default, Valeant must cure the violation within 60 days or the trustee or holders may declare the debt immediately due and payable. The full amount of the potential debt acceleration is approximately US$780 million. Valeant reported cash and short- term investments of US$253 million as of June 30, 2006. Valeant does not currently maintain committed credit facilities. In addition, the rating downgrade reflects several challenges that Valeant faces in its core pharmaceutical business that could hinder an improvement in cash flow. These challenges include: (1) boosting sales of newly launched products without a substantial increase in promotional spending; and (2) entering favorable co-development agreements with external partners for several late-stage pipeline products. Valeant's newly launched products include elapar (for Parkinson's disease) and Cesamet (a synthetic cannabinoid for chemotherapy-induced nausea and vomiting). Zelapar faces competition from Teva Pharmaceutical's new Parkinson's product (Agilect). Meanwhile, Valeant and Par Pharmaceuticals recently terminated a co-promotion arrangement for Cesamet. Valeant's late-stage pipeline products include Viramidine and retigabine. For both of these products, Moody's believes that Valeant would be challenged to fully fund the remaining clinical trials without the financial resources of a co-development partner. Based on setbacks this year in the Viramidine clinical development program, Moody's does not anticipate a launch prior to 2010 or 2011, even with a co-development partner. Moody's acknowledges several recent positive developments, including: (1) ongoing progress at cost-restructuring initiatives; and (2) an out-licensing agreement with Schering-Plough Corporation for Pradefovir in which Valeant will receive US$19.2 million upfront and milestones potentially totaling US$65 million, plus royalties on any future sales. Moody's ongoing rating review will primarily focus on Valeant's ability to avoid an acceleration of its debt maturities due to its late 10-Q filing. Moody's currently believes that by mid- January the ratings could be downgraded further unless one of the following events occurs: (1) Valeant cures the default by filing its Form 10-Q; (2) Valeant obtains waivers from the holders of the senior notes and convertible notes waiving the default or the provision related to debt acceleration; or (3) Valeant obtains committed credit facilities for the full amount of its potentially accelerated debt maturities. If one of those events does not occur, the ratings could be subject to a multi-notch downgrade. Ratings downgraded and left under review for possible further downgrade: * Valeant Pharmaceuticals International -- Corporate Family Rating to B2 from B1 -- Probability of default rating to B1 from Ba3 Rating left under review for possible further downgrade: * Valeant Pharmaceuticals International -- senior unsecured notes of US$300 million due 2011: Ba3 (LGD3, 39%) The Ba3 rating on Valeant's senior unsecured notes due 2011 is not being downgraded at this time, but remains under review for downgrade. Although the expected loss on these notes has widened as a result of the downgrade of the Corporate Family Rating, the expected loss is still within the range applicable for the Ba3 rating specified in Moody's Loss Given Default Methodology. Moody's does not rate Valeant's 3% convertible subordinated notes of US$240-million due 2010 or its 4% convertible subordinated notes of US$240 million due 2013. Headquartered in Costa Mesa, California, Valeant Pharmaceuticals International [NYSE: VRX] is a global specialty pharmaceutical company with US$823 million of 2005 revenues. ============= D E N M A R K ============= SITEL CORPORATION: Earns US$7.4 Million in 2006 Second Quarter -------------------------------------------------------------- Sitel Corp. reported US$7.4 million of net income on US$278.3 million of revenues for the quarter ended June 30, 2006, compared with US$2.6 million of net income on US$251.8 million of revenues for the same period in 2005. Revenue increased US$26.5 million, mainly due to the US$23.7 million increase in European revenue and the US$4.3 million increase in Latin America revenue, offset by a US$1.4 million decrease in Asia Pacific revenue. North American revenue in the first quarter of 2006 remained consistent compared to the same period in 2005. A decrease of US$24.3 million of revenue resulting from the loss of General Motors was offset by US$24.2 million of revenue growth primarily in customer acquisition, technical support and risk management. The weakening of the U.S. dollar versus the Canadian dollar resulted in US$600,000 of the increase. European revenue increased US$23.7 million for the three months ended June 30, 2006, compared to the same period in 2005. Higher sales volumes from new and existing clients resulted in an increase in revenue of US$24.2 million for the three months ended June 30, 2006, compared to the same period in 2005. The strengthening of the U.S. dollar versus the British pound and Euro partially offset this increase by US$500,000. Latin America revenue increased US$4.3 million for the three months ended June 30, 2006, compared to the same period in 2005. Higher sales volumes from new and existing clients resulted in an increase in revenue of US$3.4 million, while the weakening of the US dollar versus the Brazilian Real resulted in the remaining US$900,000 of the increase. Asia Pacific revenue decreased US$1.4 million for the three months ended June 30, 2006, compared to the same period in 2005. Lower sales volumes with existing clients resulted in a decrease in revenue of US$300,000, while the strengthening of the U.S. dollar versus the New Zealand and Australian dollars resulted in the remaining US$1.1 million of the decrease. The US$4.8 million increase in net income is primarily due to the US$26.5 million increase in revenues, the US$6 million gain on settlement with a business partner, the US$1.1 million decrease in interest expense, the US$1.3 million increase in equity in earnings of affiliates, and the US$549,000 increase in other income, offset by the US$28.4 million increase in operating expenses(excluding the effects of the US$6 million settlement gain). The increase in operating expenses is primarily due to the US$25.1 million increase in direct labor and telecommunications expense. Interest expense decreased US$1.1 million or 34.0% due to a gain of US$1.4 million for a reduction in interest on a Brazil tax obligation being recorded as a reduction of these expenses. This gain was partially offset by higher amortization of debt acquisition costs. Equity in earnings of affiliates increased US$1.3 million for the three months ended June 30, 2006, compared to the same period in 2005 primarily due to the US$1.2 million in insurance proceeds received by the company's India joint venture related to flood damage in 2005. Other income increased primarily as a result of fluctuations in foreign currency re-measurement gains arising from monetary assets and liabilities denominated in currencies other than a business unit's functional currency. The increase in direct labor and telecommunications expense was primarily the result of higher ramp-up costs of new client programs, particularly in Europe, and a change in the mix of services provided in the three months ended June 30, 2006, compared to the same period in 2005. At June 30, 2006, the company's balance sheet showed US$429.2 million in total assets, US$288.5 million in total liabilities, US$5.8 million in minority interests, and US$134.9 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2006, are available for free at http://researcharchives.com/t/s?1733 Merger Agreement with ClientLogic Corp. On Oct. 13, 2006, the company and ClientLogic Corporation disclosed that they have signed a definitive merger agreement. Under the terms of the agreement, a newly formed subsidiary of ClientLogic will merge with the company and pay US$4.05 per share in cash for all of the outstanding common stock of the company. The board of directors of each company has unanimously approved the transaction. The transaction is expected to be completed in the first quarter of 2007 and is subject to customary closing conditions, including approval of the company's shareholders and regulatory clearances. The company's board of directors has recommended to its shareholders that they vote in favor of the transaction. About Sitel Corp. Sitel Corp. (NYSE:SWW) -- http://www.sitel.com/-- provides outsourced customer support services. On behalf of many of the world's leading organizations, SITEL designs and improves customer contact models across its clients' customer acquisition, retention and development cycles. SITEL manages approximately two million customer interactions per day via the telephone, e-mail, Internet and traditional mail. SITEL has over 42,000 employees in 101 global contact centers, utilizing more than 32 languages and dialects to serve customers in 56 countries including Argentina, Denmark, Panama, Philippines, and the United Kingdom, among others. * * * Sitel Corp. carries Standard & Poor's Rating Services 'B' corporate credit rating. ============= F I N L A N D ============= METSO OYJ: Injects EUR15 Million to Raise Paper Unit's Capacity --------------------------------------------------------------- Metso Paper, a unit of Metso Oyj, is expanding the production capacity of paper machine rolls, and will build a new production line for big, wide castings in Jyvaskyla, Finland. The value of the investment is around EUR15 million. The new production line will enable roll castings up to 12 meters in width. The investment will also shorten the lead times and improve occupational safety at the foundry. The demand for wide paper machines has developed favorably in recent years. In addition to new paper machines, rolls are needed in the modernizations and rebuilds of the installed machines. Large paper machine rolls are one of the most demanding components in a paper machine. Metso Paper has developed the manufacturing know-how and machinery in the Jyvaskyla plant over a number of years to meet the needs of roll manufacturing. About Metso Headquartered in Helsinki, Finland, Metso Corporation -- http://www.metso.com/-- serves customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. The company's principal production plants are located in Brazil, China, Finland, France, Germany, India, Italy, South Africa, Sweden, the United Kingdom and the United States. * * * As reported in the TCR-Europe on April 11, Standard & Poor's Ratings Services revised its outlook on Finland-based machinery and engineering group Metso Corp. to positive from stable, reflecting improvements in the group's operating performance and capital structure that offer it the potential to return to a low investment-grade rating. The 'BB+' long-term and 'B' short-term corporate credit ratings, as well as the 'BB' senior unsecured debt rating on the group were affirmed. =========== F R A N C E =========== ALCATEL-LUCENT: Soliciting Consents to Amend Sr. Note Indenture --------------------------------------------------------------- Alcatel-Lucent commenced a solicitation of consents from holders of record as of Dec. 14, 2006, of Lucent's 2.75% Series A Convertible Senior Debentures due 2023 and 2.75% Series B Convertible Senior Debentures due 2025 to amend the Indenture for the Debentures. The amendment would allow Alcatel-Lucent to provide the holders of the Debentures such information, documents and other reports that are required to be filed by the company pursuant to sections 13 and 15(d) of the U.S. Securities Exchange Act of 1934, instead of having to produce separate information, documents and reports for Lucent. Under the terms of the consent solicitation, if Alcatel-Lucent receives the required consents, the company will: -- issue a full and unconditional subordinated guaranty of the Debentures; -- increase the interest payable on the principal amount of the Debentures by 12.5 basis points per year; -- provide a one-time upward adjustment to the conversion rate to 59.7015 ADSs for each US$1,000 in principal amount of Series A Debentures and to 65.1465 ADSs for each US$1,000 principal amount of Series B Debentures; and -- add a provision to the Indenture that will cause an upward adjustment to the conversion rate upon cash dividends or distributions on the Alcatel-Lucent ordinary shares in excess of EUR0.08 per share per year. The details regarding the terms of the consent solicitation can be found in the consent solicitation statement/prospectus, dated Dec. 15, 2006, which supercedes the joint solicitation statement/prospectus and supplement dated Nov. 14, 2006, and Nov. 27, 2006, respectively. All holders of the Debentures who have previously delivered consents must redeliver such consents. The consent solicitation will expire at 1:00 p.m. Eastern Time on Dec. 29, 2006, unless extended. The adoption of the proposed amendments to the Indenture requires the consent of the holders of a majority in aggregate principal amount of each series of Debentures. Holders of the Debentures can obtain copies of the consent solicitation statement/prospectus, the related letter of consent and other related materials from D.F. King & Co., the Information Agent, at +1 (888) 887-0082 (US toll-free) or, for banks and brokers, +1 (212) 269-5550. Bear, Stearns & Co. Inc. is acting as the Solicitation Agent for the consent solicitation and can be contacted at +1 (877) 696- BEAR (toll-free). About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end users. Through its operations in fixed, mobile and converged broadband networking, Internet protocol (IP) technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable communications services for people at home, at work and on the move. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * As reported in the TCR-Europe on Dec. 14, following the completion of Alcatel S.A.'s merger with Lucent Technologies Inc., at which time Alcatel was renamed Alcatel- Lucent, Fitch Ratings downgraded and removed Alcatel from Rating Watch Negative: -- Issuer Default Rating to BB from BBB-; and -- Senior unsecured debt to BB from BBB-. Alcatel's F3 short-term rating has also been withdrawn. The Rating Outlook for Alcatel-Lucent is Stable. Fitch has also withdrawn the following Lucent ratings due to the lack of clarity regarding Alcatel's support and, therefore, expected recovery of these securities in a distressed scenario: -- Issuer Default Rating BB-; -- Senior unsecured debt BB-; -- Convertible subordinated debt B; and -- Convertible trust preferred securities B. Moody's Investors Service downgraded to Ba2 from Ba1 the Corporate Family Rating of Alcatel S.A., which has completed its merger with Lucent Technologies Inc. and was renamed to Alcatel- Lucent. The ratings for senior debt of Alcatel were equally lowered to Ba2 from Ba1 and its Not-Prime rating for short-term debt was affirmed. At the same time, Moody's raised the ratings for senior debt of Lucent to Ba3 from B1 reflecting both the standalone credit profile of Lucent and, given the strategic importance of Lucent to round-off the group's product range and regional presence, expected financial support from Alcatel-Lucent, although this is not formally committed at this time. The ratings for the other legacy debt of Lucent were raised to B2 from B3 for subordinated debt and trust preferreds, and to P(B3) from P(Caa1) for preferred stock issuable under its shelf registration. Moody's has withdrawn Lucent's Corporate Family Rating of B1, assuming that management of the two entities will be fully integrated over the next several months and all of Lucent's non- US activities merged with their Alcatel counterparts. This should result in a rapid convergence of the credit risks of the affected companies. The outlook for all these ratings is stable. This rating action concludes the rating reviews initiated on April 3, 2006. Standard & Poor's, on Dec. 6, 2006, said that following news that the merger between French telecoms equipment supplier Alcatel and U.S. peer Lucent Technologies Inc. has received final approval from the U.S. Committee on Foreign Investments, it has lowered its long-term corporate credit and senior unsecured debt ratings on Alcatel -- now named Alcatel-Lucent -- to 'BB-' from 'BB', in line with its preliminary indication in its Nov. 7, 2006, research update. The 'B' short-term corporate credit rating on Alcatel-Lucent was affirmed. S&P said the outlook is positive. ALCATEL-LUCENT: Inks IP Network Contract with Hawaiian Telcom ------------------------------------------------------------- Hawaiian Telcom has selected Alcatel-Lucent's Triple Play Service Delivery Architecture as the blueprint for network transformation that will enable the delivery of new and innovative consumer and enterprise service offerings. Hawaiian Telcom will deploy Alcatel-Lucent's access and IP routing solutions to replace the existing high-speed Internet infrastructure, and to provide the scalability, reliability and speeds necessary to deliver compelling new service offerings such as IPTV, advanced and interactive Internet and premium Ethernet and IP VPN services. "By offering innovative and advanced services to our consumer, small business and enterprise customers, Hawaiian Telcom is strengthening its competitive position," Michael McHale, Chief Marketing Officer for Hawaiian Telcom, said. "The deployment of Alcatel-Lucent's Triple Play Service Delivery Architecture is a significant element of our ongoing network transformation strategy to IP-based technologies." "The transformation of operator networks is something that we continue to see in all regions around the world as our customers strive to maintain an edge in a competitive marketplace," Tim Krause, Alcatel-Lucent's Chief Marketing Officer, North America, said. "We are pleased to continue working with Hawaiian Telcom as it transforms its network and business in a way that will benefit both consumers and enterprises." Alcatel-Lucent will provide Hawaiian Telcom with its state-of- the-art ISAM product family a modular and flexible platform (including the Alcatel 7330 ISAM FTTN and the Alcatel 7342 ISAM FTTU) to extend the bandwidth potential of fiber from the network core to the subscriber premises, as well as the 7750 Service Router (SR) and Alcatel 7450 Ethernet Service Switch (ESS) to address its service routing requirements. Worldwide, more than 150 service providers in over 65 countries, including AT&T, BT, Telia Sonera, Telefonica and China Telecom, have selected the Alcatel IP portfolio. Alcatel-Lucent's ISAM product family is the industry's first IP broadband services access platform, accommodating a wide range of access technologies and network topologies. The ISAM family is specifically designed to minimize the complexity and ensure profitability as service providers transform their broadband access networks to support full triple play service adoption. In addition to Hawaiian Telecom, more than 100 service providers worldwide have chosen Alcatel-Lucent's ISAM family of products, including AT&T, China Telecom, Swisscom, and TELUS. About Hawaiian Telcom Hawaiian Telcom -- http://www.hawaiiantel.com/-- is the Hawaii's leading telecommunications provider, offering a wide spectrum of telecommunications products and services, which include local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end users. Through its operations in fixed, mobile and converged broadband networking, Internet protocol (IP) technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable communications services for people at home, at work and on the move. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * As reported in the TCR-Europe on Dec. 14, following the completion of Alcatel S.A.'s merger with Lucent Technologies Inc., at which time Alcatel was renamed Alcatel- Lucent, Fitch Ratings downgraded and removed Alcatel from Rating Watch Negative: -- Issuer Default Rating to BB from BBB-; and -- Senior unsecured debt to BB from BBB-. Alcatel's F3 short-term rating has also been withdrawn. The Rating Outlook for Alcatel-Lucent is Stable. Fitch has also withdrawn the following Lucent ratings due to the lack of clarity regarding Alcatel's support and, therefore, expected recovery of these securities in a distressed scenario: -- Issuer Default Rating BB-; -- Senior unsecured debt BB-; -- Convertible subordinated debt B; and -- Convertible trust preferred securities B. Moody's Investors Service downgraded to Ba2 from Ba1 the Corporate Family Rating of Alcatel S.A., which has completed its merger with Lucent Technologies Inc. and was renamed to Alcatel- Lucent. The ratings for senior debt of Alcatel were equally lowered to Ba2 from Ba1 and its Not-Prime rating for short-term debt was affirmed. At the same time, Moody's raised the ratings for senior debt of Lucent to Ba3 from B1 reflecting both the standalone credit profile of Lucent and, given the strategic importance of Lucent to round-off the group's product range and regional presence, expected financial support from Alcatel-Lucent, although this is not formally committed at this time. The ratings for the other legacy debt of Lucent were raised to B2 from B3 for subordinated debt and trust preferreds, and to P(B3) from P(Caa1) for preferred stock issuable under its shelf registration. Moody's has withdrawn Lucent's Corporate Family Rating of B1, assuming that management of the two entities will be fully integrated over the next several months and all of Lucent's non- U.S. activities merged with their Alcatel counterparts. This should result in a rapid convergence of the credit risks of the affected companies. The outlook for all these ratings is stable. This rating action concludes the rating reviews initiated on April 3, 2006. Standard & Poor's, on Dec. 6, 2006, said that following news that the merger between French telecoms equipment supplier Alcatel and U.S. peer Lucent Technologies Inc. has received final approval from the U.S. Committee on Foreign Investments, it has lowered its long-term corporate credit and senior unsecured debt ratings on Alcatel -- now named Alcatel-Lucent -- to 'BB-' from 'BB', in line with its preliminary indication in its Nov. 7, 2006, research update. The 'B' short-term corporate credit rating on Alcatel-Lucent was affirmed. S&P said the outlook is positive. EUROTUNNEL GROUP: French Court Sets Jan. 15 Plan Hearing -------------------------------------------------------- The Paris Commercial Court will convene a hearing on Jan. 15, 2007, to consider the approval of Eurotunnel Group's proposed safeguard plan to restructure the company's GBP6.2 billion debt. Emmanuel Hess and Laurent Le Guerneve, the two court-appointed administrators to Eurotunnel, have proposed that the Commercial Court approve the plan. "The Safeguard Plan... presents the merits of restructuring the debt to a level compatible with the capacity of the company to reimburse, but also presents the advantage of allowing operations to continue without modification of the levels of employment or working conditions," Messrs. Hess and Le Guerneve said. Terms of the Plan The principal elements of the proposals include: 1) the creation of a new company, Groupe Eurotunnel, which will launch an Exchange Tender Offer (ETO) to Eurotunnel's current shareholders. The shareholders will hold a minimum 13% of the equity in Groupe Eurotunnel; 2) Groupe Eurotunnel will subscribe to a new long-term loan of GBP2.840 billion (less than half of the current debt) from an international banking consortium; 3) Groupe Eurotunnel will issue GBP1.275 billion of convertible hybrid notes. The hybrid notes will be convertible over a maximum of three years and one month. Approximately 61.7% of the hybrids are redeemable by the company; and 4) current Eurotunnel shareholders, who subscribe to the ETO, will hold a minimum of 13% of the equity in Groupe Eurotunnel. They can subscribe directly to the hybrid, up to a value of GBP60 million (EUR87.7 million) and will benefit from free warrants. The redemption of hybrid notes by the company would allow them to increase their share of the equity from 13% to 67%. The plan requires shareholder acceptance of at least 60 percent. Reuters reports that some shareholder groups are trying to get a better deal. Disgruntled creditors can appeal the court's decision in other courts. "We will deal with the protests," Eurotunnel chairman and CEO Jacques Gounon was quoted by Reuters as saying. "What is important is that we have a sound and balanced plan, backed by creditors, bondholders, suppliers and staff." On Nov. 27, creditors representing 72% of the financial establishment committee voted in favor of the company's proposed safeguard-restructuring plan. The committee holds 70% of the company's GBP6.2 billion debt. The rail operator also obtained a unanimous vote by its principal suppliers, with 82.17% of bondholders also voting in favor of the plan. About Eurotunnel Headquartered in Folkestone, United Kingdom and Calais, France, Eurotunnel Group -- http://www.eurotunnel.co.uk/-- operates a fleet of 25 shuttle trains, which carry cars, coaches and trucks. It manages the infrastructure of the Channel Tunnel and receives toll revenues from train operating companies whose trains pass through the Tunnel. The British and French governments have granted Eurotunnel a concession to operate the Channel Tunnel until 2086. Company Crisis Eurotunnel's crisis began when costs to build the tunnels that connect U.K. and France started to overrun before it opened in 1994. The Iraq war followed, which didn't help as tourist traffic fell. In May 2004, Eurotunnel appointed Lazard (global coordinator) and Lehman Brothers as bank advisors, and Dresdner Kleinwort Wasserstein as restructuring adviser. In July 2004, auditor KPMG Audit Plc said the company faced uncertainty after 2005. The firm's survival is dependent upon its ability to put in place a refinancing plan or, if not, to obtain an agreement with the lenders under the existing Credit Agreement within the next two years, the auditor said. Eurotunnel obtained Aug. 2 an order placing the channel operator under the protection of the Court pursuant to the new safeguard legislation (Procedure de sauvegarde). KB HOME: Planned Restatement Prompts Moody's Ratings Review ----------------------------------------------------------- Moody's Investors Service placed all of the ratings of KB Home under review for possible downgrade, including its Ba1 corporate family rating and senior notes rating and Ba2 senior subordinated debt rating. This action comes after the company's recent report that it would have to restate its fiscal 2005 10-K and its 10-Q's for the first two quarters of fiscal 2006. This restatement, plus the late filing of the company's 10-Q for its third fiscal quarter of 2006, will probably not be completed before Dec. 31, 2006, assuming that the SEC does not require additional periods to be restated. Moody's has previously commented that further postponement of the company's fiscal third quarter 10-Q filing beyond Dec. 31, 2006, would prompt a review for downgrade. On Dec, 7, 2006, KB Home, in consultation with its Audit and Compliance Committee and after discussion with its auditors, Ernst & Young LLP, determined that the company's previously issued financial statements and any related reports of its independent registered public accounting firm for the fiscal years ended Nov. 30, 2003, 2004 and 2005, which are included in the company's Annual Report on Form 10-K for the year ended Nov. 30, 2005, and the interim financial statements included in the company's Quarterly Reports on Form 10-Q for the quarters ended Feb. 28, 2006, and May 31, 2006, should no longer be relied upon and will be restated. The company stated in its original 2005 10-K that based on management's evaluation under the Committee of Sponsoring Organizations of the Treadway Commission framework and applicable SEC rules, it concluded that internal controls over financial reporting were effective as of Nov. 30, 2005. However, due to the recent investigation surrounding option backdating, Moody's believes that a material weakness existed pertaining to the company's option granting practices. Moody's expects this internal control weakness to be disclosed of in the restated 2005 10-K. We also believe that management and the board will sufficiently address this weakness going forward. The company has received consent from its senior note holders to amend the indentures and to waive default until Feb. 23, 2007 for failure to file its fiscal third quarter 2006 10-Q in a timely fashion. Formal approval from its banking group for the same grace period occurred this week. Moody's review will focus on KB Home's ability to build and maintain liquidity in the face both of a weak housing environment and the worst case scenario of having to fund substantial repayment of its public senior and senior sub notes. The review's conclusion will also depend heavily on decisions made with regard to any further required restatements. An SEC decision to require restatement for more periods than currently contemplated by the company's action plan may cause the company to miss its Feb. 23, 2007 filing deadline. This would either cause the company to have to go back to its note holders and banks to seek additional waivers or trigger defaults under the notes and bank credit facility. Founded in 1957 and headquartered in Los Angeles, California, KB Home is one of America's largest homebuilders, with domestic operating divisions in the following regions and states: West Coast -- California; Southwest -- Arizona, Nevada and New Mexico; Central -- Colorado, Illinois, Indiana and Texas; and Southeast -- Florida, Georgia, North Carolina and South Carolina. Kaufman & Broad S.A., the company's 49%-owned subsidiary, is one of the largest homebuilders in France. KB Home's fiscal 2005 revenues and net income were US$9.4 billion and US$842 million, respectively. TK ALUMINUM: Posts EUR22-Mln 3Q Loss; May Breach Bond Covenant -------------------------------------------------------------- TK Aluminum Ltd. released its financial results for the third quarter and nine months ended Sept. 30, 2006. The company reported EUR22 million in net losses against EUR243.5 million in revenues for the third quarter of 2006, compared with EUR9 million in net losses against EUR229 million in revenues for the same period in 2005. TK Aluminum posted EUR35.7 million in net losses against EUR799.8 million in revenues for the third quarter of 2006, compared with EUR40.9 million in net loss against EUR747.4 million in revenues for the same period in 2005. "Our results continue to be adversely affected by the challenging automotive environment," reported Jake Hirsch, CEO of Teksid Aluminum, said. "However, we have made significant progress in supporting the Company and shareholder strategy with respect to the anticipated business model. In addition to the previously announced definitive agreement to sell certain assets to Nemak, we also can now announce the execution of a non- binding letter of intent to sell the Company's interest in France, Italy and Germany to one or more affiliates of BAVARIA Industriekapital AG." Tender Offer Concurrently, and in support of that strategy, the Company is pursuing additional sources of liquidity and announcing the termination of the Tender Offer and Consent Solicitation. "We decided to proactively seek to access the debt market in an effort to strengthen the Company's capital structure, and obtain greater financial flexibility and additional liquidity prior to the sale of certain assets to Nemak and BAVARIA," Jon Smith, Interim Chief Financial Officer of Teksid Aluminum, said. "The Company is currently examining its options with respect to the terms of the Tender Offer and Consent Solicitation and intends to recommence an offer on terms and conditions to be determined." Liquidity and Covenants Compliance The company has historically funded its working capital needs, capital expenditures and debt service requirements with cash flows from operations and existing cash resources, including borrowings under our Senior Credit Facility and proceeds from the sale of receivables under our current factoring arrangements. As of Nov. 30, 2006, the company had cash and cash reserves of EUR25 million plus available factoring lines of EUR41 million and has utilized our availability under its Senior Credit Facility. The Company was in full compliance with the financial covenants of its Senior Credit Agreement and with its Second Lien Agreement with respect to the period ended Sept. 30, 2006. Covenant Default However, the company is currently in default of certain non- financial covenants under the Senior Credit Facility and Second Lien Facility owing to failure to notify the lenders prior to certain amendments to the organizational documents of certain of its subsidiaries. It also failed to provide the lenders with a perfected security interest in its Argentine assets within the time period specified in the Senior Credit Facility and Second Lien Facility. The company is in discussions with the agents to the lenders under such facilities to waive the defaults. There can be no assurance that the company will be able to obtain a waiver on terms acceptable, or at all. In addition, the company expects that it may not comply with the financial covenants in our Senior Credit Facility and Second Lien Facility for the quarter ending Dec. 31, 2006. Following a failure to comply with these financial covenants, any available borrowings under the Senior Credit Facility would not be permitted without agreement from our lenders. In addition, following the failure to comply, the senior and second lien lenders would have the ability to exercise all of their rights including requiring the amounts due under the Senior Credit Facility and Second Lien Facility to become due and payable. In the event of acceleration under such facilities, bondholders would be entitled to declare the aggregate principal and unpaid interest outstanding under the senior notes to be due and payable pursuant to the cross default provisions of the senior notes indenture. "In order to assure sufficient access to capital to fund operations in the near term, the company is exploring a variety of options to improve our near term liquidity," the company said. "We have obtained definitive commitments from certain customers related to favorable payment terms and the company is negotiating with a third party to provide the Company with a loan to be used to fund the Company's liquidity needs." In addition, the consummation of the Nemak transaction will provide cash, which will be used to repay a portion of our outstanding debt obligations. The deterioration of the automotive market, unfavorable foreign exchange movements, and new third party financing will adversely affect the amount of funds available for the repurchase of our Senior Notes, which was contemplated at the time of announcement of the Nemak transaction. As previously announced, the consummation of the Nemak transaction is subject to various conditions, including the receipt of certain consents and waivers from our bondholders and other customary conditions, including regulatory approvals. There can be no assurance that we will be successful in obtaining additional capital resources or that the Nemak transaction will be consummated within the time period necessary to provide us with sufficient liquidity to fund operations, or at all. Should the Nemak transaction not be consummated, and the Company is not successful in obtaining additional third party financing, the Company intends to pursue all available options in light of its liquidity needs. Headquartered in Turin, Italy, TK Aluminum Ltd. -- http://www.teksidaluminum.com/-- manufactures light metal castings for the automotive industry. The company's core products are cylinder heads and blocks, and transmission and suspension components produced with a wide range of technologies: semipermanent mold gravity casting, high-pressure die casting, low pressure, precision sand core and lost foam. The company also operates in France, Poland, U.S.A., Mexico, Brazil, Argentina and China. * * * As reported in the TCR-Europe on Nov. 8, Standard & Poor's Ratings Services placed its 'CCC+' long-term corporate credit rating on Bermuda-incorporated TK Aluminum Ltd. on CreditWatch with developing implications, meaning that the rating could be raised, lowered, or affirmed. As reported in the TCR-Europe on Nov. 7, Moody's Investors Service placed the Caa1 Corporate Family Rating of Teksid Aluminum Ltd. and the Caa3 senior unsecured rating of Teksid Aluminum Luxembourg Sarl SCA on review with an uncertain direction, following the company's announcement that it has entered into a definitive agreement to sell certain core assets to Tenedora Nemak, S.A. de C.V and the intention of a redemption of outstanding debt with the proceeds of the asset disposal. On Review Direction Uncertain: Issuer: TK Aluminum Ltd. * Corporate Family Rating, currently Caa1 Issuer: Teksid Aluminum Luxembourg Sarl SCA * Senior Unsecured Regular Bond/Debenture, currently Caa3 Outlook Actions: Issuer: TK Aluminum Ltd. * Outlook, Changed To Rating Under Review From Negative Issuer: Teksid Aluminum Luxembourg Sarl SCA * Outlook, Changed To Rating Under Review From Negative TK ALUMINUM: S&P Cuts Rating to CCC- on Possible Covenant Breach ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating to 'CCC-' from 'CCC+' on Bermuda- incorporated TK Aluminum Ltd., a manufacturer of aluminum auto parts. The rating remains on CreditWatch with developing implications, where it was placed on Nov. 6, 2006. The developing implications mean that the rating could be raised, lowered, or affirmed. "The downgrade follows the company's announcement that it may not be in compliance with the financial covenants on its senior and second-lien credit facilities at Dec. 31, 2006," said Standard & Poor's credit analyst Barbara Castellano. TKA is actively negotiating to increase its near-term liquidity sources. The tender offer for the senior notes due in 2011 has been terminated unsuccessfully, and a new tender offer for these notes should be launched shortly. This delay could be reflected in the closure date of TKA's deal to sell its operations in North and South America, China, and Poland to Tenedora Nemak S.A. de C.V., thereby increasing liquidity needs to sustain operating activity for a longer period of time. "We are now concerned that TKA might not respect the payments contractually due on its financial debt, and that there is increasing risk of a solution that would include agreements to either reduce or postpone the scheduled payments, which would trigger a default according to our criteria," said Ms. Castellano. TKA has also announced the execution of a non-binding letter of intent to sell its assets in France, Italy, and Germany to BAVARIA Industriekapital AG. If such deal is completed, TKA will have sold all of its operating activities. TKA's net financial debt for the nine months ended Sept. 30, 2006, totaled about EUR540 million, adjusted for leases and pension liabilities. VALEANT PHARMA: Moody's Cuts Rating to B2 Over Default Notice ------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of Valeant Pharmaceuticals International to B2 from B1, and kept Valeant's ratings under review for possible further downgrade. Moody's initially placed the ratings under review for possible downgrade on Oct. 23, 2006. This rating action follows the company's recent announcement that the trustee for the holders of its 3% convertible notes due 2010 has declared a notice of default related to Valeant's late filing of its Form 10-Q for the quarter ended Sept. 30. According to the indentures governing US$300-million of Valeant's senior notes, US$240 million of convertible notes due 2010 and US$240-million of convertible notes due 2013, failure to file timely SEC reports constitutes a covenant violation. If the trustee or holders of 25% of the respective series of notes or convertibles declares a default, Valeant must cure the violation within 60 days or the trustee or holders may declare the debt immediately due and payable. The full amount of the potential debt acceleration is approximately US$780 million. Valeant reported cash and short- term investments of US$253 million as of June 30, 2006. Valeant does not currently maintain committed credit facilities. In addition, the rating downgrade reflects several challenges that Valeant faces in its core pharmaceutical business that could hinder an improvement in cash flow. These challenges include: (1) boosting sales of newly launched products without a substantial increase in promotional spending; and (2) entering favorable co-development agreements with external partners for several late-stage pipeline products. Valeant's newly launched products include elapar (for Parkinson's disease) and Cesamet (a synthetic cannabinoid for chemotherapy-induced nausea and vomiting). Zelapar faces competition from Teva Pharmaceutical's new Parkinson's product (Agilect). Meanwhile, Valeant and Par Pharmaceuticals recently terminated a co-promotion arrangement for Cesamet. Valeant's late-stage pipeline products include Viramidine and retigabine. For both of these products, Moody's believes that Valeant would be challenged to fully fund the remaining clinical trials without the financial resources of a co-development partner. Based on setbacks this year in the Viramidine clinical development program, Moody's does not anticipate a launch prior to 2010 or 2011, even with a co-development partner. Moody's acknowledges several recent positive developments, including: (1) ongoing progress at cost-restructuring initiatives; and (2) an out-licensing agreement with Schering-Plough Corporation for Pradefovir in which Valeant will receive US$19.2 million upfront and milestones potentially totaling US$65 million, plus royalties on any future sales. Moody's ongoing rating review will primarily focus on Valeant's ability to avoid an acceleration of its debt maturities due to its late 10-Q filing. Moody's currently believes that by mid- January the ratings could be downgraded further unless one of the following events occurs: (1) Valeant cures the default by filing its Form 10-Q; (2) Valeant obtains waivers from the holders of the senior notes and convertible notes waiving the default or the provision related to debt acceleration; or (3) Valeant obtains committed credit facilities for the full amount of its potentially accelerated debt maturities. If one of those events does not occur, the ratings could be subject to a multi-notch downgrade. Ratings downgraded and left under review for possible further downgrade: * Valeant Pharmaceuticals International -- Corporate Family Rating to B2 from B1 -- Probability of default rating to B1 from Ba3 Rating left under review for possible further downgrade: * Valeant Pharmaceuticals International -- senior unsecured notes of US$300 million due 2011: Ba3 (LGD3, 39%) The Ba3 rating on Valeant's senior unsecured notes due 2011 is not being downgraded at this time, but remains under review for downgrade. Although the expected loss on these notes has widened as a result of the downgrade of the Corporate Family Rating, the expected loss is still within the range applicable for the Ba3 rating specified in Moody's Loss Given Default Methodology. Moody's does not rate Valeant's 3% convertible subordinated notes of US$240-million due 2010 or its 4% convertible subordinated notes of US$240 million due 2013. Headquartered in Costa Mesa, California, Valeant Pharmaceuticals International [NYSE: VRX] is a global specialty pharmaceutical company with US$823 million of 2005 revenues. VTB BANK FRANCE: Fitch Affirms Individual Rating at C/D ------------------------------------------------------- Fitch Ratings affirmed the ratings of Russia-based JSC Vneshtorgbank and its London-, Paris- and Cyprus-based subsidiaries, respectively VTB Europe plc, VTB Bank France SA. and Russian Commercial Bank (Cyprus), at: * JSC Vneshtorgbank: -- Foreign currency Issuer Default rating: 'BBB+', Short-term foreign currency 'F2', Individual 'C/D', Support '2', National Long-term 'AAA(rus)', Local currency IDR 'BBB+'. The Outlooks on the bank's IDRs and National Long-term rating are Stable. VTB's IDRs, Short-term and Support ratings are underpinned by its majority state ownership, importance to the Russian banking system, and Fitch's view of the high probability of support from the Russian state in case of need. However, the bank's support floor continues to depend on its status, ownership and importance to the Russian banking system. Upside potential for the Individual rating is currently limited given VTB's exposure to political risk, pressured capitalization, transparency issues surrounding the bank's largest credit exposures and increasing operational and credit risks. * VTB Europe plc: -- Foreign currency IDR 'BBB', Short-term foreign currency, 'F3', Individual 'C' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. In light of VTBE's 89%-owner, VTB, which is Russia's second largest, state-owned bank, as well as the comfort letter Fitch understands that VTB has provided to the UK's Financial Services Authority in respect of VTBE (which although not legally binding provides a strong moral obligation to support VTBE), there is a high probability that support for VTBE would be forthcoming from VTB, if needed, flowing ultimately from the Russian state. Fitch does not expect an upgrade of VTBE's Individual rating in the near future. Downward movement could result from failure to offset revenue pressures, a decline in asset quality or an increase in risk appetite. * VTB Bank France SA.: -- Foreign currency IDR 'BBB', Short-term foreign currency 'F3', Individual 'C/D' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. The Issuer Default, Short-term and Support ratings of VTBF reflect Fitch's view of the high probability of support from VTB, if needed, flowing ultimately from the Russian government. This is based on VTBF's 87%- ownerhip by VTB, as well as the assurances provided by VTB to the French authorities in respect of VTBF's solvency and by the Central Bank of Russia (VTBF's former majority owner) in respect of VTBF's liquidity (up until end-2007). Fitch does not expect an upgrade of VTBF's Individual rating in the near future. However, downward movement could result from failure to offset revenue pressures or should VTB channel upstream a large amount of capital from VTBF. * Russian Commercial Bank (Cyprus): Foreign currency IDR 'BBB', Short-term foreign currency 'F3' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. RCBC's Individual rating of 'D/E' is affirmed and withdrawn. RCBC's ratings reflect the high probability of support being forthcoming from its 100% shareholder, VTB, in case of need. Under the terms of RCBC's banking license granted by the Cypriot authorities, its obligations are guaranteed by VTB in the case of RCBC being wound up. However, in light of possible timeliness issues relating to enforcement of the guarantee, and also its cross-border nature, Fitch maintains a one-notch differential between the ratings of VTB and RCBC. The withdrawal of RCBC's Individual rating reflects the extent of integration between RCBC and its parent, which makes an analysis of RCBC on a standalone basis difficult. Fitch is informed that RCBC will remain a direct subsidiary of VTB for the foreseeable future, notwithstanding the ongoing restructuring of VTB's western European subsidiaries. Founded in 1990, VTB is Russia's second-largest bank by assets and equity. Historically a corporate bank, it is also aggressively expanding its domestic small and mid-sized enterprise and retail banking operations. VTB's strategy is to become a mid-sized European bank. Following a number of acquisitions, VTB group comprises three major Russian banks, seven banks in Western Europe, including VTBE and VTBF (both acquired at end-2005) and RCBC, and four banks in CIS countries. It also has offices in Africa and plans to open new offices in Asia. ============= G E O R G I A ============= METROMEDIA INT'L: Files 2004 Annual Report with U.S. SEC -------------------------------------------------------- Metromedia International Group Inc. has filed with the U.S. Securities and Exchange Commission its 2004 Annual Report on Form 10-K. With the filing of the 2004 Form 10-K, the Company has completed a significant step in the restatement process that began in June 2005 and the Company is working diligently on completing and filing with the SEC its outstanding Quarterly Reports on Form 10-Q for the fiscal periods ended March 31, June 30 and Sept. 30, 2005 and 2006 and its outstanding Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2005. The Company cannot at this time provide any assurances as to when these outstanding periodic reports will be completed and filed with the SEC. About Metromedia Based in Charlotte, North Carolina, Metromedia International Group (PINK SHEETS: MTRM-Common Stock and MTRMP-Preferred Stock) -- http://www.metromedia-group.com/-- through its subsidiary, Metromedia International Telecommunications, owns interests in telecom and cable TV operations in Russia, Georgia, and elsewhere in Eastern Europe. The Company's core businesses includes Magticom, Ltd., the leadingmobile telephony operator in Tbilisi, Georgia, and Telecom Georgia, a well-positioned Georgian long distance telephone operator. * * * In October 2006, Metromedia said it is filing a Chapter 11 Plan in the U.S. after receiving a binding offer to acquire all of the Company's business interests in Georgia for a cash price of US$480 million from an investment group comprised of: -- Istithmar, an alternative investment house based in Dubai, United Arab Emirates; -- Salford Georgia, the Georgian office of Salford Capital Partners Inc., a private equity and investment management company which manages investments in the CIS and Central & Eastern Europe; and -- Emergent Telecom Ventures, a communications merchant bank focused on pursuing telecommunications opportunities in the Emerging Markets. Upon the approval of the plan, all of the preferred and common equity interests in the Company will be converted into the right to receive the cash remaining after payment of all allowed claims and the costs and expenses associated with the sale and the Wind-Up. Moody's Investors Service has placed Metromedia's subordinated debt rating at B3 and junior subordinated debt rating at B2. ============= G E R M A N Y ============= ABR FORMENBAU: Creditors Must File Claims by Dec. 27 ---------------------------------------------------- Creditors of ABR Formenbau GmbH have until Dec. 27 to register their claims with court-appointed provisional administrator Bernd Depping. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Jan. 18, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Wuppertal Meeting Room A234 2nd Floor Isle 2 42103 Wuppertal Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Wuppertal opened bankruptcy proceedings against ABR Formenbau GmbH on Oct. 31. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Bernd Depping Hofkamp 138 42103 Wuppertal Germany The Debtor can be reached at: ABR Formenbau GmbH Schulstrasse 30 42551 Velbert Germany ALT HEDDERNHEIMER: Registration of Claims Ends Dec. 27 ------------------------------------------------------ Creditors of Alt Heddernheimer Backhaus Stoerkel & Schoenherr GmbH & Co. KG have until Dec. 27 to register their claims with court-appointed provisional administrator Dr. Jan Markus Plathner. Creditors and other interested parties are encouraged to attend the meeting at 9:10 a.m. on Jan. 25, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Frankfurt/Main Hall 2 Building F Klingerstrasse 20 60313 Frankfurt/Main Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Frankfurt am Main opened bankruptcy proceedings against Alt Heddernheimer Backhaus Stoerkel & Schoenherr GmbH & Co. KG on Nov. 1. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Dr. Jan Markus Plathner Lyoner Strasse 14 60528 Frankfurt am Main Germany Tel: 069/9623340 Fax: 069/96233422 The Debtor can be reached at: Alt Heddernheimer Backhaus Stoerkel & Schoenherr GmbH & Co. KG Alt Heddernheim 6 60439 Frankfurt am Main Germany ANTHRACITE EURO: Moody's Rates EUR25-Mln Class E Notes at Ba2 ------------------------------------------------------------- Moody's Investors Service assigned definitive ratings to the Notes issued by Anthracite Euro CRE CDO 2006-1 plc, the first Commercial Real Estate CDO comprised entirely of European collateral. The ratings assigned are: -- EUR142.5-million Class A Senior Floating Rate Notes due 2042: Aaa; -- EUR29-million Class B Senior Floating Rate Notes due 2042: Aa1; -- EUR48.5-million Class C Deferrable Interest Floating Rate Notes due 2042: A1; -- EUR31-million Class D Deferrable Interest Floating Rate Notes due 2042: Baa2; and -- EUR25-million Class E Deferrable Interest Floating Rate Notes due 2042: Ba2; The structure also includes an EUR66.5-million Class F Subordinated Notes due 2042, which has not been rated by Moody's. The definitive ratings address the expected loss posed to investors by the legal final maturity date of each Class of Notes. These definitive ratings are based upon: 1. An assessment of the credit quality and of the diversification of the assets to be included in the portfolio; 2. An assessment of the eligibility criteria, reinvestment criteria and portfolio limits applicable to the future additions to the portfolio; 3. The protection against losses through the subordination of the more junior classes of notes to the more senior classes of notes; 4. The expertise of Blackrock Financial Management, Inc. in the management of B, C and Mezzanine real estate loans, CMBS tranches, REOC and REIT debt; and 5. The legal and structural integrity of the transaction. Anthracite Euro CRE CDO 2006-1 p.l.c. is a managed Commercial Real Estate CDO relating to a EUR335 million portfolio of B, C and Mezzanine real estate loans, CMBS tranches, REOC and REIT debt. The portfolio will be managed by Blackrock Financial Management, Inc. Approximately 90% of the portfolio has already been acquired at the closing date and the remaining portion will be acquired during the ramp-up period. Thereafter, the portfolio of securities will be actively managed and the portfolio manager may advise the issuer to buy or sell collateral debt securities. Any addition or removal of collateral debt securities will be subject to a number of portfolio criteria. The portfolio at closing will comprise B and C real estate loans and CMBS bonds for respectively 56.6% and 36.6% of the target par amount. The underlying assets are mainly drawn from the U.K. and Germany. The collateral will be predominantly denominated in Euros, but may also consist of assets denominated in other eligible currencies such as British Pounds, Danish Crowns, Norwegian Crowns, Swedish Crowns and Swiss Francs. The FX risk related to all the non Euro assets will be hedged via perfect asset swaps with eligible counter parties. ARBEITSGEMEINSCHAFT FRANKFURTER: Claims Bar Date Set at Dec. 27 --------------------------------------------------------------- Creditors of Arbeitsgemeinschaft Frankfurter Glas- und Gebaudereiniger-Gesellschaft mit beschrankter Haftung have until Dec. 27 to register their claims with court-appointed provisional administrator Angelika Amend. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Jan. 25, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Frankfurt/Main Hall 2 Building F Klingerstrasse 20 60313 Frankfurt/Main Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Frankfurt/Main opened bankruptcy proceedings against Arbeitsgemeinschaft Frankfurter Glas- und Gebaudereiniger-Gesellschaft mit beschrankter Haftung on Oct. 24. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Angelika Amend Minnholzweg 2b D-61476 Kronberg Germany Tel: 06173/78340 Fax: 06173/783422 The Debtor can be reached at: Arbeitsgemeinschaft Frankfurter Glas- und Gebaudereiniger-Gesellschaft mit beschrankter Haftung Sontraer Strasse 3 60386 Frankfurt am Main Germany ASAT HOLDINGS: Weak Liquidity Prompts S&P's Junk Ratings -------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on ASAT Holdings Ltd. to 'CCC' from 'B- ', reflecting heightened liquidity concerns and persistent operating losses. The outlook is negative. At the same time, the issue rating on US$150 million in 9.25% senior notes due in 2011 that are guaranteed by ASAT was also lowered to 'CCC' from 'B-'. "Our rating on ASAT reflects the company's very weak liquidity and financial positions, limited financial flexibility due to a heavy debt burden, concentrated customer base, and exposure to the highly competitive and cyclical semiconductor industry," said Standard & Poor's credit analyst Jacphanie Cheung. These weaknesses are partly offset by opportunities for the company to increase its profitability through ongoing cost-cutting measures and access to advanced packaging technologies. The company is facing significant financial pressure. In its quarterly report for the period ended July 31, 2006, it said: "As we continue to face commercial business challenges, we have occasionally been in default or otherwise been out of compliance with the covenants and conditions in the agreements governing our debt. Such defaults have been cured or otherwise remedied by obtaining amendments or waivers from our creditors." Standard & Poor's has very limited access to the company's management and financial information. The rating is based on publicly available information. ASAT has extremely tight liquidity and limited financial flexibility because of its heavy debt burden. Its cash balance has fallen significantly due to negative operating cash flows and high capital expenditure resulting from the relocation of its manufacturing facilities from Hong Kong to China. The company indicated that at the end of October 2006 it had US$8.8 million in cash. This was marginally sufficient to cover the semi-annual interest payment of US$6.9 million on its senior notes due 2011. A US$1.3 million undrawn credit line and US$5 million remaining from a purchase money loan facility should help support ASAT's liquidity needs over the short term. However, the availability of the remaining purchase money loan facility is subject to certain conditions. In addition, the company's heavy interest burden, persistent operating losses, competitive pressure on prices, and heavy capital expenditure should continue to exert pressure on the company's liquidity over the near term. ASAT is a small operator in the highly fragmented and competitive semiconductor sector. The company's capital structure is highly leveraged, as reflected by a very high ratio of net debt to capitalization of 162% as at July 31, 2006, due to accumulating losses. In the first quarter of fiscal 2007, ended July 31, 2006, the company posted a net loss of US$8.1 million, compared with a net loss of US$17.1 million in the previous quarter. Although the company indicates that its preliminary results for the second quarter of fiscal 2007 show an improvement in its gross margin and narrower losses, Standard & Poor's is concerned that the company's cash balance has continued to fall to a marginal level. The company maintains operations in Germany, Hong Kong, China, Singapore, Korea, and the United States. BOLAT DIENSTLEISTUNGEN: Creditors Must File Claims by Dec. 27 ------------------------------------------------------------- Creditors of Bolat Dienstleistungen GmbH have until Dec. 27 to register their claims with court-appointed provisional administrator Manfred Burghardt. Creditors and other interested parties are encouraged to attend the meeting at 9:55 a.m. on Feb. 7, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Frankfurt/Main Hall 2 Building F Klingerstrasse 20 60313 Frankfurt/Main Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Frankfurt/Main opened bankruptcy proceedings against Bolat Dienstleistungen GmbH on Oct. 27. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Manfred Burghardt Theobald-Christ-Strasse 24 60316 Frankfurt am Main Tel: 069/94414770 Fax: 069/94414780 The Debtor can be reached at: Bolat Dienstleistungen GmbH Westerbachstrasse 277 65936 Frankfurt am Main Germany DAIMLERCHRYSLER: Unit Ordered to Pay US$350MM in U.S. Fraud Case ---------------------------------------------------------------- The Multnomah County Circuit Court has ordered DaimlerChrysler North American Holding Corp. and its heavy truck subsidiary, Freightliner LLC, to pay US$350 million in damages in connection with a multinational fraud case, CNNMoney reports. The court found DaimlerChrysler liable for US$280 million of the punitive damages, with the remaining US$70 million asserted against Freightliner, reports say. The Oregon Court found that Freightliner transferred assets between its divisions in an effort to avoid a legal judgment. The U.S. Court's ruling follows a British Court order handed down last year compelling Freightliner to pay approximately US$489 million to German truck maker MAN AG, CNNMoney adds. DaimlerChrysler intends to appeal the jury ruling. A company spokeswoman has reiterated that Freightliner had never sought to hide assets from MAN. About Freightliner LLC Headquartered in Portland, Ore., Freightliner LLC -- http://www.freightliner.com/-- is a medium- and heavy-duty truck manufacturer in North America. Freightliner produces and markets Class 3-8 vehicles and is a company of DaimlerChrysler. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. Outlook As reported in the TCR-Europe on Oct. 30, DaimlerChrysler said it expects a slight decrease in worldwide demand for automobiles in the fourth quarter and thus slower market growth than in Q4 2005. For full-year 2006, the company anticipates market growth of around 3%. It expects unit sales in 2006 to be lower than in the previous year (4.8 million units). On Sept. 15, DaimlerChrysler reduced the Group's operating- profit target for 2006 to an amount in the magnitude of US$6.3 billion. Although the company now has to assume that the profit contribution from EADS will be US$0.3 billion lower than originally anticipated because of the delayed delivery of the Airbus A380, DaimlerChrysler is maintaining this earnings target due to very positive business developments in the divisions Mercedes Car Group, Truck Group and Financial Services. DAS SITZT: Deadline for Submission of Claims Set Dec 27 ------------------------------------------------------- Creditors of Das Sitzt Lederpolstermoebel GmbH have until Dec. 27 to register their claims with court-appointed provisional administrator Peter Baumgarte. Creditors and other interested parties are encouraged to attend the meeting at 10:30 a.m. on Jan. 23, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Hanover Hall 226 2nd Floor Office Building Hamburg Avenue 26 30161 Hanover Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Hanover opened bankruptcy proceedings against Das Sitzt Lederpolstermoebel GmbH on Oct. 20. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Peter Baumgarte Lange-Hop-Strasse 158 30539 Hannover Tel: 0511/954750 Fax: 0511/9547599 The Debtor can be reached at: Das Sitzt Lederpolstermoebel GmbH Opelstr. 36-40 30916 Isernhagen Germany DOMUS SULTAN: Credit Must Register Claims by Dec. 23 ---------------------------------------------------- Creditors of Domus Sultan Verwaltungsgesellschaft mbH have until Dec. 23 to register their claims with court-appointed provisional administrator Norbert Kruse. Creditors and other interested parties are encouraged to attend the meeting at 9:45 a.m. on Jan. 15, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Muenster Meeting Room 13 B Gerichtsstr. 2-6 48149 Muenster Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Muenster opened bankruptcy proceedings against Domus Sultan Verwaltungsgesellschaft mbH on Nov. 8. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Norbert Kruse Bonhoefferstr. 10 48282 Emsdetten Germany The Debtor can be reached at: Domus Sultan Verwaltungsgesellschaft mbH Siemensstr. 4 48341 Altenberge Germany E-MAC DE 2006-II: Fitch Rates EUR3.5-Mln Class F Notes at BB+ ------------------------------------------------------------- Fitch Ratings assigned final ratings to E-MAC DE 2006-II B.V's mortgage-backed securities: -- EUR151.0 million Class A1 due 2048 (ISIN XS0276932539): 'AAA'; -- EUR465.7 million Class A2 due 2058 (ISIN XS0276933347): 'AAA'; -- EUR35.0 million Class B due 2058 (ISIN XS0276933859): 'AA-'; -- EUR.24.5 million Class C due 2058 (ISIN XS0276934667): 'A-'; -- EUR14.0 million Class D due 2058 (ISIN XS0276935045): 'BBB'; -- EUR9.8 million Class E due 2058 (ISIN XS0276936019): 'BBB-'; and -- EUR3.5 million Class F due 2058 (ISIN XS0276936951): 'BB+', The final ratings are based on the quality of the collateral and available credit enhancement and excess spread. The ratings also take into account the transaction's sound legal structure, the underwriting and servicing of the mortgage loans and the available liquidity facility. At closing, credit enhancement, provided by subordination and a reserve fund, totals 12.4% for the Class A1 and A2 notes, 7.4% for the Class B notes, 3.9% for the Class C notes, 1.9% for the Class D notes and 0.5% for the Class E notes. The Class F notes, accounting for 0.5% of the notes' balance at closing, fund the initial balance of the reserve fund. After closing, the reserve fund increases to 1.2% of the initial mortgage balance through excess spread. In this EUR700 million transaction, GMAC-RFC originated the residential mortgage loans on behalf of GMAC-RFC Investments B.V. The assignment of title and security rights becomes effective upon the delivery of the mortgage certificates to Kreditwerk Hypotheken-Management GmbH (rated 'RPS 3+D'), which holds them on behalf of the issuer. Stichting Security Trustee E-MAC DE 2006-II holds the claims against the issuer on behalf of the noteholders. The portfolio consists of 100% first-ranking fixed-rate mortgages secured on residential properties located in Germany. As of the cut-off date, Nov. 1, 2006, the provisional portfolio consisted of 4,686 mortgage loan parts originated by GMAC-RFC with a current total outstanding nominal amount of approximately EUR550.1 million, ramping up to a maximum amount of EUR700 million. The weighted average current loan-to-market value of the portfolio is 98.1% while the weighted average debt-to-income ratio is about 33.1%. This is the first E-MAC DE transaction to include the disbursed parts of partially disbursed loans. The non-disbursed part, totaling EUR100 million, will be held in a construction loan account. To mitigate, for example, construction risk (such as the default of a builder), a dedicated reserve is in place. Fitch applied its German residential mortgages default model. Fitch also modeled the cash-flow contribution from any excess margin using stress scenarios determined by its default model. The cash-flow test showed that each Class of rated certificates could withstand loan losses at a level corresponding to the related stress scenario without incurring any principal loss or temporary interest shortfall. EGO ELEKTRO: Claims Filing Period Ends December 27 -------------------------------------------------- Creditors of EGO Elektro Grosshandel Ochtrup GmbH & Co.Kommanditgesellschaft have until Dec. 27 to register their claims with court-appointed provisional administrator Andreas Sontopski. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on Jan. 16, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Muenster Meeting Room 13 B Gerichtsstr. 2-6 48149 Muenster Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Muenster opened bankruptcy proceedings against EGO Elektro Grosshandel Ochtrup GmbH & Co.Kommanditgesellschaft, Brookkamp 2, 48607 Ochtrup on Oct. 30. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Andreas Sontopski Gnoiener Platz 1 48493 Wettringen Germany The Debtor can be reached at: EGO Elektro Grosshandel Ochtrup GmbH & Co.Kommanditgesellschaft Brookkamp 2 48607 Ochtrup Germany GELDILUX-TS-2005: Fitch Affirms Low-B Ratings on 6 Note Classes --------------------------------------------------------------- Fitch Ratings affirmed GELDILUX-TS-2005 S.A.'s floating-rate notes due December 2012: * Series 1 -- EUR2.10 billion Class A (ISIN XS0221114696): 'AAA' -- EUR36.3 million Class B (ISIN XS0221115743): 'A' -- EUR25.3 million Class C (ISIN XS0221116634): 'BBB' -- EUR11 million Class D (ISIN XS0221116980): 'BB' -- EUR4.4 million Class E (ISIN XS0221117442): 'B' * Series 2 -- EUR1.24 billion Class A (ISIN XS0221120156): 'AAA' -- EUR21.45 million Class B (ISIN XS0221120826): 'A' -- EUR14.95 million Class C (ISIN XS0221121477): 'BBB' -- EUR6.5 million Class D (ISIN XS0221121980): 'BB' -- EUR2.6 million Class E (ISIN XS0221122442): 'B' * Series 3 -- EUR1.9 million Class A (ISIN XS0221125114): 'AAA' -- EUR33 million Class B (ISIN XS0221126195): 'A' -- EUR23 million Class C (ISIN XS0221127326): 'BBB' -- EUR10 million Class D (ISIN XS0221127912): 'BB' -- EUR4 million Class E (ISIN XS0221128647): 'B'. The affirmations reflect the transaction's stable performance to date. Only one loan is currently in default (defined as delinquent for 30 days or more), representing approximately 0.01% of the total portfolio balance. One further loan had previously defaulted (0.016% of the portfolio), but has since been worked-out without any loss. As of the November 2006 investor report, there are currently no delinquencies (due payments outstanding between one and 29 days). The portfolio is currently made up of 0.13% of loans rated 8, 9, 10/Z (the lowest rating categories on Bayerische Hypo-und Vereinsbank AG's internal rating scale). Currently 30.8% of the portfolio is secured. The weighted average collateralization ratio of the initial portfolio is 27.8%. The minimum percentage is 25%. The portfolio has an average remaining term of 63 days compared to a maximum average remaining term of 90 days. The largest regional concentration is in Bavaria: 46.1% compared to 45.5% at closing. The largest industry concentration is the real-estate sector, totaling 28.3% compared to 38.7% at closing. The loans pay interest on a fixed basis and the issuer has entered into an interest-rate swap agreement with HVB Banque Luxembourg to enable the payment of Euribor on the issued notes. In addition, the issuer has entered into a currency swap agreement, as a bucket equivalent up to EUR1.8 billion is denominated in Swiss francs. Currently 22.5% of loans are denominated in Swiss francs. The transaction is a true-sale securitization of short-term loans to German residents. Geldilux-TS-2005 SA is a special purpose vehicle incorporated under the laws of the Grand Duchy of Luxembourg. The proceeds from the note issuance were used to purchase a EUR5.5 billion portfolio of Euroloans originated and serviced by HVB on behalf of the seller, HVB Lux. HTE UNTERNEHMENSGRUPPE: Claims Registration Ends Dec. 27 -------------------------------------------------------- Creditors of HTE Unternehmensgruppe Grundstuecks- und Verwaltungsgesellschaft mbH have until Dec. 27 to register their claims with court-appointed provisional administrator Ulrike Hoge-Peters. Creditors and other interested parties are encouraged to attend the meeting at 10:20 a.m. on Feb. 7, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Frankfurt/Main Hall 2 Building F Klingerstrasse 20 60313 Frankfurt/Main Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Frankfurt/Main opened bankruptcy proceedings against HTE Unternehmensgruppe Grundstuecks- und Verwaltungsgesellschaft mbH on Nov. 3. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Ulrike Hoge-Peters Cronstettenstrasse 30 D-60322 Frankfurt am Main Germany Tel: 069/9591100 Fax: 069/95911012 The Debtor can be reached at: HTE Unternehmensgruppe Grundstuecks- und Verwaltungsgesellschaft mbH Zeilweg 13 60439 Frankfurt am Main Germany IKB PROMISE-I: Moody's Assigns Ba1 Rating on Class E Notes ---------------------------------------------------------- Moody's Investors Service assigned these ratings to the debt issuance of Promise-I Mobility 2006-1 GmbH: -- Super Senior Swap, 89.98% of the total protected notional amount: Aaa; -- Class A+ Floating Rate Credit Linked Notes, 0.02% of the total protected notional amount: Aaa; -- Class A Floating Rate Credit Linked Notes, 2.80% of the total protected notional amount: Aaa; -- Class B Floating Rate Credit Linked Notes, 0.90% of the total protected notional amount: Aa2; -- Class C Floating Rate Credit Linked Notes, 1.50% of the total protected notional amount: A2; -- Class D Floating Rate Credit Linked Notes, 1.95% of the total protected notional amount: Baa2; and -- Class E Floating Rate Credit Linked Notes, 0.45% of the total protected notional amount: Ba1. The Class F Floating Rate Credit Linked Notes, 2.40% of the total protected notional amount, will also be issued. These were not rated by Moody's. The Notes have a scheduled maturity date in March 2015. These ratings address the expected loss posed to investors by the legal final maturity date of the Notes in March 2017. Under this transaction, IKB Deutsche Industriebank AG buys protection against losses incurred on EUR- and non-EUR denominated loans to predominantly German SME borrowers (including syndicated loans and sub-participations as well as real estate lease refinancing and forfeiting), which were granted by IKB pursuant to its credit and collection policies. Protection is bought from Kreditanstalt fur Wiederaufbau (KfW) with respect to each tranche. KfW in turn sells credit-linked certificates of indebtedness to the issuer for each mezzanine Class. The initial amount of the reference portfolio is EUR1,699,795,481. However, the pool can be ramped up to the replenishment cap of EUR2.4 bn which is scheduled to be done with the outstanding loans from a clean up call of the Promise I 2000-1 transaction. The initial pool consists of 1009 reference claims belonging to 555 different debtor groups. Replenishment is permitted during the first 4 years of the transaction under the constraint of stringent replenishment criteria such as concentration limits and Moody's CDOROM test. Furthermore, the breach of certain replenishment triggers leads to a temporary suspension or permanent termination of replenishment. However, if suspension trigger breaches are cured, replenishment may resume. Essentially, the replenishment suspension and termination triggers relate to realized losses, defaults and weighted average life of the reference pool. For replenishment the portfolio will have a weighted average IKB rating of at least 2.35. Moody's ratings for Promise-I Mobility 2006-1 GmbH, a German issuer, are based primarily on: (1) The credit quality and debtor composition of the reference pool, for which IKB's credit and collection policies were reviewed and internal ratings mapped to the Moody's scale based on a representative sample of debtors; (2) The Aaa rating of KfW as the Issuer of credit linked certificates of indebtedness (Schuldscheine) serving as note collateral; (3) The replenishment suspension and termination triggers incorporated in the transaction; (4) The sound legal structure of KfW's established Promise programme; and (5) The credit enhancement provided to the notes by the subordination of the more junior tranches. PS-LEASING GMBH: Creditors Must Register Claims by Dec. 27 ---------------------------------------------------------- Creditors of PS-Leasing GmbH have until Dec. 27 to register their claims with court-appointed provisional administrator Jochen Schnake. Creditors and other interested parties are encouraged to attend the meeting at 8:30 a.m. on Jan. 17, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Bielefeld Hall 4065 4th Floor Court Route 6 33602 Bielefeld Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Bielefeld opened bankruptcy proceedings against PS-Leasing GmbH on Nov. 3. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Jochen Schnake Ravensberger Str. 11 u. 12 33824 Werther Germany The Debtor can be reached at: PS-Leasing GmbH Friedrich-Verleger-Str. 3 33602 Bielefeld Germany QUELLENTHERME SERVICE: Claims Registration Ends Dec. 27 ------------------------------------------------------- Creditors of Quellentherme Service GmbH have until Dec. 27 to register their claims with court-appointed provisional administrator Reinhard Bohlig. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Feb. 7, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Fritzlar Room 17 Building A Schladenweg 1 34560 Fritzlar Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Fritzlar opened bankruptcy proceedings against Quellentherme Service GmbH on Nov. 1. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Reinhard Bohlig Briloner Landstrasse 14 34497 Korbach Germany Tel: 05631/950970 Fax: 05631/950919 The Debtor can be reached at: Quellentherme Service GmbH Reitzenhagener Strasse 15 34537 Bad Wildungen Germany RAHE BAUTEC: Creditors Must File Claims by Dec. 27 -------------------------------------------------- Creditors of RAHE bautec GmbHG have until Dec. 27 to register their claims with court-appointed provisional administrator Jochen Schnake. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on Jan. 17. 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Bielefeld Hall 4065 4th Floor Court Route 6 33602 Bielefeld Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Bielefeld opened bankruptcy proceedings against RAHE bautec GmbHG on Oct. 25. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Jochen Schnake Ravensberger Str. 11 u. 12 33824 Werther Germany The Debtor can be reached at: RAHE bautec GmbHG Grafenheider Str. 11 33729 Bielefeld Germany SHOPPING-SERVICES 4 U: Claims Registration Ends Dec. 27 ------------------------------------------------------- Creditors of shopping-services 4 U GmbH have until Dec. 27 to register their claims with court-appointed provisional administrator Ulrich Maschmann. Creditors and other interested parties are encouraged to attend the meeting at 9:45 a.m. on Jan. 17, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Wiesbaden E 36 A 3rd Floor Building E Moritzstrasse 5 Hinterhaus 65185 Wiesbaden Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Wiesbaden opened bankruptcy proceedings against shopping-services 4 U GmbH on Oct. 26. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Ulrich Maschmann Martha-von-Opel-Weg 9 65307 Bad Schwalbach Tel: 06124/70670 Fax: 06124/706720 The Debtor can be reached at: shopping-services 4 U GmbH Berliner Str. 275 65205 Wiesbaden Germany TUI AG: Eyes 3,600 Job Cuts at Tourism Division ----------------------------------------------- TUI AG intends to cut 3,600 jobs, representing six percent of its work force, at its tourism division as part of its cost- cutting measures, Bloomberg News reports. According to the report, TUI will eliminate 2,600 jobs in the U.K., 400 in Germany and 200 in France. In a statement, TUI said it is selling a harbor terminal in Montreal, several small vessels owned by its CP Ships unit and properties not needed for the operating business. The travel company added that it intends to boost sales by upgrading its air fleet, adding hotels and expanding Internet bookings. According to BBC News, TUI had ordered 65 Boeing aircraft in a deal worth about EUR2 billion. TUI will also merge its German low-cost airlines and explore "further strategic options" for the carriers. The company expects a decline in earnings this year due to higher costs in the shipping division and stagnant tourism revenues. The profitability of the shipping division was adversely affected by lower freight rates and surging fuel prices. The company has lowered its 2008 earnings forecast for both the tourism and shipping divisions. The company is targeting a EUR250 million reduction in its annual expenses in the next two years, EUR100 million of which will be personnel costs. By 2008, it aims to cut net debt to EUR2.5 billion (US$3.3 billion) from EUR2.9 billion in September this year, Bloomberg relates. About TUI Headquartered in Hanover, Germany, TUI AG -- http://www.tui-group.com/en-- engages in the tourism and shipping sectors. The Company's core activities are in the tourism business, focusing mainly on the markets of Central, Northern and Western Europe. TUI AG's shipping and logistics activities are contained within its Hapag-Lloyd Container Linie GmbH and CP Ships Ltd. subsidiaries. * * * As reported in the TCR-Europe on Nov. 15, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Germany-based shipping and tourism group TUI AG to 'BB' from 'BB+', owing to its weakening operating results. S&P said the outlook is negative. In August 2006, Moody's Investors Service placed on review for possible downgrade the Ba2/B1 ratings of TUI AG as a result of the company's announcement that the Shipping division's full- year earnings for 2006 will be impacted by higher operating costs and lower-than-expected freight rates. The ratings affected by the review are TUI's Ba2 Corporate Family Rating, the Ba2 Senior Unsecured Long-Term ratings, and the B1 Subordinated ratings. =========== G R E E C E =========== YIOULA GLASSWORKS: Moody's Affirms B3 Rating on EUR140-Mln Notes ---------------------------------------------------------------- Moody's Investors Service changed the outlook to negative from stable on the Corporate Family Rating of Yioula Glassworks S.A. and affirmed the B2 CFR as well as the B3 rating for the EUR140-million senior notes due in 2015. The last rating action was Nov. 10, 2005, when the ratings were assigned following the bond issuance. "The change in outlook to negative reflects the weakened profitability due to rising input costs, most notably natural gas, and also increased leverage as a consequence of higher investments into its asset base in Romania, Bulgaria and the Ukraine ", said Martin Kohlhase, Moody's lead analyst for the European packaging industry. This expansion into its asset base with expected peak capital expenditures in 2006 of more than EUR40 million and additional expenditure of EUR30 million in 2007, is expected to result in negative free cash flow for the forthcoming fiscal year. Furthermore, the efficiency and profitability improvements, which the company expects to achieve with these investments over the next couple of years, are offset to some extent by: (i) a shift towards countries with a more volatile and higher operating risk environment and (ii) at least during the initial stage the implementation risk of capital expenditures of this magnitude. The rating agency also believes that the growing shift towards countries outside of the domestic market will put additional pressure on management. Any indication that the risk factors such as the above described should materialize could put pressure on the rating. On the other hand, ongoing rationalization and cost benefits from a more efficient asset base in line with company expectation should bring Yioula's credit metrics (EBIT margin in the high teens and positive free cash flow) in line with the B2 rating category over the next twelve to 18 months. Headquartered in Athens, Greece, Yioula Glassworks S.A. produces a wide variety of glass containers for the food and beverage industries throughout southeastern Europe and the Ukraine as well as glass tableware for the Greek and Romanian markets. Revenues for the nine months ended Sept. 30, 2006, were EUR155.4 million. ============= H U N G A R Y ============= ACTUANT CORP: Earns US$25.2 Million in 2006 Fourth Quarter ---------------------------------------------------------- Actuant Corporation reported record sales and earnings for its fourth quarter and fiscal year ended Aug. 31, 2006. Fourth quarter fiscal 2006 net earnings was US$25.2 million, compared to US$19.1 million for the fourth quarter of fiscal 2005. Fiscal 2006 fourth quarter results include a US$4.9 million pre-tax charge covering a portion of the company's restructuring of its European electrical business, offset by a US$5.4 million income tax benefit primarily related to the reversal of a tax valuation allowance for net operating losses. Net earnings for fiscal 2006 were US$92.6 million compared to US$71.3 million for the prior year. Fourth quarter sales increased approximately 21% to US$324.6 million compared to US$269.4 million in the prior year, driven by strong base business growth and sales from acquired businesses. Excluding foreign currency exchange rate changes and sales from acquired businesses, fourth quarter sales increased approximately 13% from the comparable prior year period. Sales for the fiscal year ended Aug. 31, 2006, were US$1.2 billion, approximately 23% higher than the US$976 million in the comparable prior year period, reflecting sales volume added through business acquisitions and strong base business growth. Excluding the impact of foreign currency rate changes and sales from acquired businesses, full year sales increased 9% year-over-year. Commenting on the results, Robert C. Arzbaecher, Chief Executive Officer, stated, "Actuant finished fiscal 2006 strongly, driving another quarter of significant year-over-year sales and earnings growth. The continued profitable growth in our industrial tools businesses, Enerpac and Hydratight, led the record results. Additionally, as expected, automotive business revenues grew 63% for the quarter on sales related to new convertible model introductions." Mr. Arzbaecher added, "We are very happy with Actuant's progress in fiscal 2006 as we continued to execute our business model to drive strong cash flow and earnings growth. Our team achieved 9% sales growth excluding currency and acquisitions, deployed approximately US$129 million in aggregate on acquisitions that strengthened our existing business, and continued to drive LEAD (Lean Enterprise Across Disciplines) and organizational competency throughout the business. Fiscal 2006's 21% EPS growth was the fifth consecutive year of EPS growth in excess of 15% since Actuant's creation through a spin-off. We were also able to convert those strong earnings into cash, generating over US$100 million of cash flow, which was again in excess of net income." Net debt at Aug. 31, 2006, was approximately US$455 million, compared to US$460 million at the beginning of the quarter. The reduction in net debt during the quarter was attributable to fourth quarter cash flow of approximately US$29 million, partially offset by the US$24 million of borrowings to fund the August 2006 Actown acquisition. Availability under the company's revolving credit facility remained strong at approximately US$170 million as of Aug. 31, 2006. Year-over-year, Actuant's fiscal 2006 fourth quarter and full fiscal year operating profit increased to US$38.2 million and US$154.1 million, respectively, including the fourth quarter European Electrical restructuring charge of US$4.9 million. Year-over-year fourth quarter operating profit margins expanded from 13.1% to 13.3%, excluding the negative impact of the restructuring charge in fiscal 2006. At Aug. 31, 2006, the company's consolidated balance sheet showed US$1.2 million in total assets, US$850,410 in total liabilities, and US$362,965 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Aug. 31, 2006, are available for free at http://researcharchives.com/t/s?1730 About Actuant Corporation Headquartered in Glendale, Wisconsin, Actuant Corp. (NYSE:ATU) -- http://www.actuant.com/-- is a diversified industrial company with operations in more than 30 countries, including Austria, Hungary, Poland, Italy, Spain, the Netherlands, France, Russia, Turkey, Germany, and the United Kingdom. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Since its creation through a spin-off in 2000, Actuant has grown its sales from USUS$482 million to over USUS$1 billion and its market capitalization from USUS$113 million to over USUS$1.5 billion. The company employs a workforce of approximately 6,000 worldwide. Actuant Corporation trades on the NYSE under the symbol ATU. * * * As reported in the Troubled Company Reporter-Europe on Oct. 24, Moody's Investors Service affirmed its Ba2 corporate family rating for Actuant Corp. ============= I R E L A N D ============= AFFILIATED COMPUTER: Identifies US$51MM Addt'l. Non-Cash Expense ---------------------------------------------------------------- Affiliated Computer Services Inc. determined that the incremental cumulative non-cash compensation expense through June 30, 2006, related to incorrect accounting measurement dates is approximately US$51 million and that prior year financial statements will be restated. The determination was arrived at after it has completed the review and evaluation of the results of its internal investigation of its historical stock option practices. The company is currently reviewing the tax impact, including related interest and penalties, associated with stock options and other matters. The company's management made on Dec. 7, 2006, a presentation of its determination to the audit committee of its board of directors who concurred with and approved management's determination. Previously, the company disclosed that it was continuing to review and evaluate the results of the internal investigation and recent accounting guidelines established by the Securities and Exchange Commission to determine the accounting consequences of the use of incorrect measurement dates for certain stock option grants during the period from 1994 through 2005. The company's management is also currently evaluating the impact of the results of the internal investigation of its stock option practices on its internal control over financial reporting and disclosure controls and procedures. The company's management has already discussed the matter with the Audit Committee and PricewaterhouseCoopers LLP, the company's independent registered public accounting firm. Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland and Singapore. * * * As reported in the Troubled Company Reporter-Europe on Nov. 30, Standard & Poor's Ratings Services kept its ratings for Affiliated Computer Services Inc. including the 'B+' corporate credit rating, on CreditWatch, where they were placed with negative implications on Sept. 29, 2006. As reported in the TCR-Europe on Oct. 4, Moody's Investors Service placed the Ba2 ratings of Affiliated Computer Services on review for possible downgrade. The review for downgrade was prompted by the company's ongoing independent investigation into historical stock option practices, which has resulted in the company's delay in filing its 10-K for its fiscal year ended June 2006. The company has received certain waivers from credit facility lenders through Dec. 31 related to the options matter. The review will examine the company's access to internal and external sources of liquidity as well as the prospects for filing the June 10-K and subsequent financial statements with the SEC by Dec. 31. As part of this review, Moody's will assess the company's acquisition plans and contract commitments. If the company becomes current in the filing of its financial statements by Dec. 31 and any restatement is unlikely to result in a material cash outflow, the ratings will likely be confirmed at Ba2. Ratings Placed on Review for Possible Downgrade: * Ba2 Senior Secured Term Loan Rating * Ba2 Senior Secured Revolving Credit Facility Rating * Ba2 Senior Notes Rating (US$500 Million due 2010 and 2015) * Ba2 Corporate Family Rating ELAN CORP: Applies for TYSABRI's Supplemental License with FDA -------------------------------------------------------------- Elan Corp. plc and Biogen Idec submitted a supplemental Biologics License Application to the U.S. Food and Drug Administration seeking approval to market TYSABRI(R) (natalizumab) in the U.S. as a treatment for patients with moderately to severely active Crohn's disease. The filing is based on the results of three randomized, double- blind, placebo-controlled, multi-center trials of TYSABRI assessing the safety and efficacy as both an induction and maintenance therapy -- ENCORE (Efficacy of Natalizumab in Crohn's Disease Response and Remission), ENACT-1 (Efficacy of Natalizumab as Active Crohn's Therapy) and ENACT-2 (Evaluation of Natalizumab As Continuous Therapy). The filing also includes proposed labeling and a risk management plan, both of which are similar to those approved for the multiple sclerosis indication. About the Company Headquartered in Ireland, Elan Corporation plc (NYSE: ELN) -- http://www.elan.com/-- is a neuroscience-based biotechnology company. Elan shares trade on the New York, London and Dublin Stock Exchanges. * * * As reported in the TCR-Europe on Nov. 13, Standard & Poor's Ratings Services assigned its 'B' rating to Elan Finance plc's proposed offering of US$500 million senior unsecured notes due 2013, to be issued in a combination of fixed and floating-rate notes. Elan Finance plc is a wholly owned subsidiary of Dublin, Ireland-based specialty pharmaceutical company Elan Corp. plc. The notes are guaranteed on a senior unsecured basis by Elan and all of its existing material subsidiaries. Outstanding ratings on Elan (including the 'B' corporate credit rating) and its related entities were affirmed. The ratings outlook is stable. Also, Moody's Investors Service assigned a B3 rating to the proposed new senior unsecured notes of Elan Finance plc reflecting a guarantee from Elan Corporation plc and material subsidiaries. At the same time, Moody's affirmed Elan's existing ratings (B3 Corporate Family Rating) and the stable rating outlook. The rating outlook is stable. Rating assigned: Elan Finance plc * B3 fixed rate senior notes due 2013 (guaranteed by Elan Corporation, plc and subsidiaries) * B3 floating rate senior notes due 2013 (guaranteed by Elan Corporation, plc and subsidiaries) Ratings affirmed: Elan Corporation, plc * B3 corporate family rating Elan Finance plc * B3 fixed rate senior notes of US$850 million due 2011 (guaranteed by Elan Corporation, plc and subsidiaries) * B3 floating rate senior notes of US$300 million due 2011 (guaranteed by Elan Corporation, plc and subsidiaries) Athena Neurosciences Finance, LLC * B3 senior notes of US$613 million due 2008 (guaranteed by Elan Corporation, plc and subsidiaries) Moody's does not rate Elan's US$254 million convertible notes due 2008. ========= I T A L Y ========= METSO OYJ: Injects EUR15 Million to Raise Paper Unit's Capacity --------------------------------------------------------------- Metso Paper, a unit of Metso Oyj, is expanding the production capacity of paper machine rolls, and will build a new production line for big, wide castings in Jyvaskyla, Finland. The value of the investment is around EUR15 million. The new production line will enable roll castings up to 12 meters in width. The investment will also shorten the lead times and improve occupational safety at the foundry. The demand for wide paper machines has developed favorably in recent years. In addition to new paper machines, rolls are needed in the modernizations and rebuilds of the installed machines. Large paper machine rolls are one of the most demanding components in a paper machine. Metso Paper has developed the manufacturing know-how and machinery in the Jyvaskyla plant over a number of years to meet the needs of roll manufacturing. About Metso Headquartered in Helsinki, Finland, Metso Corporation -- http://www.metso.com/-- serves customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. The company's principal production plants are located in Brazil, China, Finland, France, Germany, India, Italy, South Africa, Sweden, the United Kingdom and the United States. * * * As reported in the TCR-Europe on April 11, Standard & Poor's Ratings Services revised its outlook on Finland-based machinery and engineering group Metso Corp. to positive from stable, reflecting improvements in the group's operating performance and capital structure that offer it the potential to return to a low investment-grade rating. The 'BB+' long-term and 'B' short-term corporate credit ratings, as well as the 'BB' senior unsecured debt rating on the group were affirmed. TK ALUMINUM: Posts EUR22-Mln 3Q Loss; May Breach Bond Covenant -------------------------------------------------------------- TK Aluminum Ltd. released its financial results for the third quarter and nine months ended Sept. 30, 2006. The company reported EUR22 million in net losses against EUR243.5 million in revenues for the third quarter of 2006, compared with EUR9 million in net losses against EUR229 million in revenues for the same period in 2005. TK Aluminum posted EUR35.7 million in net losses against EUR799.8 million in revenues for the third quarter of 2006, compared with EUR40.9 million in net loss against EUR747.4 million in revenues for the same period in 2005. "Our results continue to be adversely affected by the challenging automotive environment," reported Jake Hirsch, CEO of Teksid Aluminum, said. "However, we have made significant progress in supporting the Company and shareholder strategy with respect to the anticipated business model. In addition to the previously announced definitive agreement to sell certain assets to Nemak, we also can now announce the execution of a non- binding letter of intent to sell the Company's interest in France, Italy and Germany to one or more affiliates of BAVARIA Industriekapital AG." Tender Offer Concurrently, and in support of that strategy, the Company is pursuing additional sources of liquidity and announcing the termination of the Tender Offer and Consent Solicitation. "We decided to proactively seek to access the debt market in an effort to strengthen the Company's capital structure, and obtain greater financial flexibility and additional liquidity prior to the sale of certain assets to Nemak and BAVARIA," Jon Smith, Interim Chief Financial Officer of Teksid Aluminum, said. "The Company is currently examining its options with respect to the terms of the Tender Offer and Consent Solicitation and intends to recommence an offer on terms and conditions to be determined." Liquidity and Covenants Compliance The company has historically funded its working capital needs, capital expenditures and debt service requirements with cash flows from operations and existing cash resources, including borrowings under our Senior Credit Facility and proceeds from the sale of receivables under our current factoring arrangements. As of Nov. 30, 2006, the company had cash and cash reserves of EUR25 million plus available factoring lines of EUR41 million and has utilized our availability under its Senior Credit Facility. The Company was in full compliance with the financial covenants of its Senior Credit Agreement and with its Second Lien Agreement with respect to the period ended Sept. 30, 2006. Covenant Default However, the company is currently in default of certain non- financial covenants under the Senior Credit Facility and Second Lien Facility owing to failure to notify the lenders prior to certain amendments to the organizational documents of certain of its subsidiaries. It also failed to provide the lenders with a perfected security interest in its Argentine assets within the time period specified in the Senior Credit Facility and Second Lien Facility. The company is in discussions with the agents to the lenders under such facilities to waive the defaults. There can be no assurance that the company will be able to obtain a waiver on terms acceptable, or at all. In addition, the company expects that it may not comply with the financial covenants in our Senior Credit Facility and Second Lien Facility for the quarter ending Dec. 31, 2006. Following a failure to comply with these financial covenants, any available borrowings under the Senior Credit Facility would not be permitted without agreement from our lenders. In addition, following the failure to comply, the senior and second lien lenders would have the ability to exercise all of their rights including requiring the amounts due under the Senior Credit Facility and Second Lien Facility to become due and payable. In the event of acceleration under such facilities, bondholders would be entitled to declare the aggregate principal and unpaid interest outstanding under the senior notes to be due and payable pursuant to the cross default provisions of the senior notes indenture. "In order to assure sufficient access to capital to fund operations in the near term, the company is exploring a variety of options to improve our near term liquidity," the company said. "We have obtained definitive commitments from certain customers related to favorable payment terms and the company is negotiating with a third party to provide the Company with a loan to be used to fund the Company's liquidity needs." In addition, the consummation of the Nemak transaction will provide cash, which will be used to repay a portion of our outstanding debt obligations. The deterioration of the automotive market, unfavorable foreign exchange movements, and new third party financing will adversely affect the amount of funds available for the repurchase of our Senior Notes, which was contemplated at the time of announcement of the Nemak transaction. As previously announced, the consummation of the Nemak transaction is subject to various conditions, including the receipt of certain consents and waivers from our bondholders and other customary conditions, including regulatory approvals. There can be no assurance that we will be successful in obtaining additional capital resources or that the Nemak transaction will be consummated within the time period necessary to provide us with sufficient liquidity to fund operations, or at all. Should the Nemak transaction not be consummated, and the Company is not successful in obtaining additional third party financing, the Company intends to pursue all available options in light of its liquidity needs. Headquartered in Turin, Italy, TK Aluminum Ltd. -- http://www.teksidaluminum.com/-- manufactures light metal castings for the automotive industry. The company's core products are cylinder heads and blocks, and transmission and suspension components produced with a wide range of technologies: semipermanent mold gravity casting, high-pressure die casting, low pressure, precision sand core and lost foam. The company also operates in France, Poland, U.S.A., Mexico, Brazil, Argentina and China. * * * As reported in the TCR-Europe on Nov. 8, Standard & Poor's Ratings Services placed its 'CCC+' long-term corporate credit rating on Bermuda-incorporated TK Aluminum Ltd. on CreditWatch with developing implications, meaning that the rating could be raised, lowered, or affirmed. As reported in the TCR-Europe on Nov. 7, Moody's Investors Service placed the Caa1 Corporate Family Rating of Teksid Aluminum Ltd. and the Caa3 senior unsecured rating of Teksid Aluminum Luxembourg Sarl SCA on review with an uncertain direction, following the company's announcement that it has entered into a definitive agreement to sell certain core assets to Tenedora Nemak, S.A. de C.V and the intention of a redemption of outstanding debt with the proceeds of the asset disposal. On Review Direction Uncertain: Issuer: TK Aluminum Ltd. * Corporate Family Rating, currently Caa1 Issuer: Teksid Aluminum Luxembourg Sarl SCA * Senior Unsecured Regular Bond/Debenture, currently Caa3 Outlook Actions: Issuer: TK Aluminum Ltd. * Outlook, Changed To Rating Under Review From Negative Issuer: Teksid Aluminum Luxembourg Sarl SCA * Outlook, Changed To Rating Under Review From Negative TK ALUMINUM: S&P Cuts Rating to CCC- on Possible Covenant Breach ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating to 'CCC-' from 'CCC+' on Bermuda- incorporated TK Aluminum Ltd., a manufacturer of aluminum auto parts. The rating remains on CreditWatch with developing implications, where it was placed on Nov. 6, 2006. The developing implications mean that the rating could be raised, lowered, or affirmed. "The downgrade follows the company's announcement that it may not be in compliance with the financial covenants on its senior and second-lien credit facilities at Dec. 31, 2006," said Standard & Poor's credit analyst Barbara Castellano. TKA is actively negotiating to increase its near-term liquidity sources. The tender offer for the senior notes due in 2011 has been terminated unsuccessfully, and a new tender offer for these notes should be launched shortly. This delay could be reflected in the closure date of TKA's deal to sell its operations in North and South America, China, and Poland to Tenedora Nemak S.A. de C.V., thereby increasing liquidity needs to sustain operating activity for a longer period of time. "We are now concerned that TKA might not respect the payments contractually due on its financial debt, and that there is increasing risk of a solution that would include agreements to either reduce or postpone the scheduled payments, which would trigger a default according to our criteria," said Ms. Castellano. TKA has also announced the execution of a non-binding letter of intent to sell its assets in France, Italy, and Germany to BAVARIA Industriekapital AG. If such deal is completed, TKA will have sold all of its operating activities. TKA's net financial debt for the nine months ended Sept. 30, 2006, totaled about EUR540 million, adjusted for leases and pension liabilities. =================== K A Z A K H S T A N =================== ALEXANDRIT HOLDING: Claims Filing Period Ends Jan. 24, 2007 ----------------------------------------------------------- LLP Alexandrit Holding has declared insolvency. Creditors have until Jan. 24, 2007, to submit written proofs of claim to: LLP Alexandrit Holding Mostovaya Str. 22-8 Micro District Chubary Almaty District Astana Kazakhstan ALTAISERVICECENTRE LLP: Court Commences Bankruptcy Proceedings -------------------------------------------------------------- The Specialized Inter-Regional Economic Court of East Kazakhstan Region commenced bankruptcy proceeding against LLP Altaiservicecentre on Nov. 16, 2006. BAIMURAT LLP: Kostanai Court Declares Firm Insolvent ---------------------------------------------------- The Specialized Inter-Regional Economic Court of Kostanai Region declared LLP Baimurat insolvent. The Debtor can be contacted at 8 (3142) 22-02-93 or 26-62-66. CINEMA INVEST: Claims Filing Period Ends Jan. 26, 2007 ------------------------------------------------------ LLP Cinema Invest has declared insolvency. Creditors have until Jan. 26, 2007, to submit written proofs of claim to: LLP Cinema Invest Micro District Astana 2 Taugul Almaty Kazakhstanc MURAGER LLP: Claims Filing Period Ends Jan. 26, 2007 ---------------------------------------------------- The Specialized Inter-Regional Economic Court of East Kazakhstan Region commenced bankruptcy proceedings against LLP Murager after finding it insolvent. Creditors have until Jan. 26, 2007, to submit written proofs of claim to: LLP Murager Uritsky Str. 121 Ust-Kamenogorsk East Kazakhstan Region Kazakhstan Tel: 8 (3232) 25-57-62 NEWS-PRINT LLP: Claims Filing Period Ends Jan. 24, 2007 ------------------------------------------------------- LLP Publishing House News-Print has declared insolvency. Creditors have until Jan. 24, 2007, to submit written proofs of claim to: Gogol Str. 95/70 Almaty Kazakhstan Tel: 8 (3272) 65-00-93 NITS INCOMSYSTEM: Creditors Must File Claims by Jan. 24, 2007 ------------------------------------------------------------- Kazakhstansky Branch of CJSC Nits Incomsystem has declared insolvency. Creditors have until Jan. 24, 2007, to submit written proofs of claim to: CJSC Nits Incomsystem Kazakhstansky Branch 7 Kilometer Ilyiskoye High Road Otegen Baatyr Ilyisky District Almaty Region Kazakhstan PRINCIP LLP: East Kazakhstan Court Starts Bankruptcy Proceedings ---------------------------------------------------------------- The Specialized Inter-Regional Economic Court of East Kazakhstan Region commenced bankruptcy proceeding against LLP Company Princip on Oct. 27. The Debtor can be reached at: Shmidt Str. 15 Semipalatinsk East Kazakhstan Region Kazakstan STROY-SUPPLY-PLUS 777: Court Starts Bankruptcy Procedure -------------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda Region commenced bankruptcy proceeding against LLP Stroy-Supply- Plus 777. The Debtor can be reached at: LLP Stroy-Supply-Plus 777 Dovator Str. 3 Karaganda Karaganda Region Kazakhstan =================== K Y R G Y Z S T A N =================== KYRGYZ SHAMPANY-KAMEKS: Creditors Meeting Slated for Dec. 25 ------------------------------------------------------------ The temporary insolvency manager of Joint Venture Trade House Kyrgyz Shampany-Kameks will convene a meeting of creditors at 10:00 a.m. on Dec. 25, at: Joint Venture Trade House Kyrgyz Shampany-Kameks Sovetskaya Str. 220 Bishkek Kyrgyzstan Creditors will be asked to confirm the final report of the temporary insolvency manager, among others. Proxies must have authorization to vote. Inquiries can be addressed to (+996 312) 62-39-69. TECHNOLOGY ELECTRONIC: Claims Registration Ends Jan. 5, 2007 ------------------------------------------------------------ LLC Technology Electronic has declared insolvency. Creditors have until Jan. 5, 2007, to submit written proofs of claim to: LLC Technology Electronic Tolstoi Str. 210 Bishkek Kyrgyzstan =================== L U X E M B O U R G =================== GELDILUX-TS-2005: Fitch Affirms Low-B Ratings on 6 Note Classes --------------------------------------------------------------- Fitch Ratings affirmed GELDILUX-TS-2005 S.A.'s floating-rate notes due December 2012: * Series 1 -- EUR2.10 billion Class A (ISIN XS0221114696): 'AAA' -- EUR36.3 million Class B (ISIN XS0221115743): 'A' -- EUR25.3 million Class C (ISIN XS0221116634): 'BBB' -- EUR11 million Class D (ISIN XS0221116980): 'BB' -- EUR4.4 million Class E (ISIN XS0221117442): 'B' * Series 2 -- EUR1.24 billion Class A (ISIN XS0221120156): 'AAA' -- EUR21.45 million Class B (ISIN XS0221120826): 'A' -- EUR14.95 million Class C (ISIN XS0221121477): 'BBB' -- EUR6.5 million Class D (ISIN XS0221121980): 'BB' -- EUR2.6 million Class E (ISIN XS0221122442): 'B' * Series 3 -- EUR1.9 million Class A (ISIN XS0221125114): 'AAA' -- EUR33 million Class B (ISIN XS0221126195): 'A' -- EUR23 million Class C (ISIN XS0221127326): 'BBB' -- EUR10 million Class D (ISIN XS0221127912): 'BB' -- EUR4 million Class E (ISIN XS0221128647): 'B'. The affirmations reflect the transaction's stable performance to date. Only one loan is currently in default (defined as delinquent for 30 days or more), representing approximately 0.01% of the total portfolio balance. One further loan had previously defaulted (0.016% of the portfolio), but has since been worked-out without any loss. As of the November 2006 investor report, there are currently no delinquencies (due payments outstanding between one and 29 days). The portfolio is currently made up of 0.13% of loans rated 8, 9, 10/Z (the lowest rating categories on Bayerische Hypo-und Vereinsbank AG's internal rating scale). Currently 30.8% of the portfolio is secured. The weighted average collateralization ratio of the initial portfolio is 27.8%. The minimum percentage is 25%. The portfolio has an average remaining term of 63 days compared to a maximum average remaining term of 90 days. The largest regional concentration is in Bavaria: 46.1% compared to 45.5% at closing. The largest industry concentration is the real-estate sector, totaling 28.3% compared to 38.7% at closing. The loans pay interest on a fixed basis and the issuer has entered into an interest-rate swap agreement with HVB Banque Luxembourg to enable the payment of Euribor on the issued notes. In addition, the issuer has entered into a currency swap agreement, as a bucket equivalent up to EUR1.8 billion is denominated in Swiss francs. Currently 22.5% of loans are denominated in Swiss francs. The transaction is a true-sale securitization of short-term loans to German residents. Geldilux-TS-2005 SA is a special purpose vehicle incorporated under the laws of the Grand Duchy of Luxembourg. The proceeds from the note issuance were used to purchase a EUR5.5 billion portfolio of Euroloans originated and serviced by HVB on behalf of the seller, HVB Lux. NORTEL NETWORKS: Amends US$750 Million Master Facility Agreement ---------------------------------------------------------------- Nortel Networks Corporation's principal operating subsidiary, Nortel Networks Limited, has amended its master facility agreement with Export Development Canada. The amendment extends the maturity date of the Facility for an additional year to Dec. 31, 2008. The total Facility is maintained at US$750 million, including the existing US$300 million of committed support for performance bonds and similar instruments. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corp (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on Oct. 5, 2006, Moody's Investors Service upgraded its B3 Corporate Family Rating for Nortel Networks Corp. to B2. ===================== N E T H E R L A N D S ===================== ALCATEL-LUCENT: Soliciting Consents to Amend Sr. Note Indenture --------------------------------------------------------------- Alcatel-Lucent commenced a solicitation of consents from holders of record as of Dec. 14, 2006, of Lucent's 2.75% Series A Convertible Senior Debentures due 2023 and 2.75% Series B Convertible Senior Debentures due 2025 to amend the Indenture for the Debentures. The amendment would allow Alcatel-Lucent to provide the holders of the Debentures such information, documents and other reports that are required to be filed by the company pursuant to sections 13 and 15(d) of the U.S. Securities Exchange Act of 1934, instead of having to produce separate information, documents and reports for Lucent. Under the terms of the consent solicitation, if Alcatel-Lucent receives the required consents, the company will: -- issue a full and unconditional subordinated guaranty of the Debentures; -- increase the interest payable on the principal amount of the Debentures by 12.5 basis points per year; -- provide a one-time upward adjustment to the conversion rate to 59.7015 ADSs for each US$1,000 in principal amount of Series A Debentures and to 65.1465 ADSs for each US$1,000 principal amount of Series B Debentures; and -- add a provision to the Indenture that will cause an upward adjustment to the conversion rate upon cash dividends or distributions on the Alcatel-Lucent ordinary shares in excess of EUR0.08 per share per year. The details regarding the terms of the consent solicitation can be found in the consent solicitation statement/prospectus, dated Dec. 15, 2006, which supercedes the joint solicitation statement/prospectus and supplement dated Nov. 14, 2006, and Nov. 27, 2006, respectively. All holders of the Debentures who have previously delivered consents must redeliver such consents. The consent solicitation will expire at 1:00 p.m. Eastern Time on Dec. 29, 2006, unless extended. The adoption of the proposed amendments to the Indenture requires the consent of the holders of a majority in aggregate principal amount of each series of Debentures. Holders of the Debentures can obtain copies of the consent solicitation statement/prospectus, the related letter of consent and other related materials from D.F. King & Co., the Information Agent, at +1 (888) 887-0082 (US toll-free) or, for banks and brokers, +1 (212) 269-5550. Bear, Stearns & Co. Inc. is acting as the Solicitation Agent for the consent solicitation and can be contacted at +1 (877) 696- BEAR (toll-free). About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end users. Through its operations in fixed, mobile and converged broadband networking, Internet protocol (IP) technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable communications services for people at home, at work and on the move. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * As reported in the TCR-Europe on Dec. 14, following the completion of Alcatel S.A.'s merger with Lucent Technologies Inc., at which time Alcatel was renamed Alcatel- Lucent, Fitch Ratings downgraded and removed Alcatel from Rating Watch Negative: -- Issuer Default Rating to BB from BBB-; and -- Senior unsecured debt to BB from BBB-. Alcatel's F3 short-term rating has also been withdrawn. The Rating Outlook for Alcatel-Lucent is Stable. Fitch has also withdrawn the following Lucent ratings due to the lack of clarity regarding Alcatel's support and, therefore, expected recovery of these securities in a distressed scenario: -- Issuer Default Rating BB-; -- Senior unsecured debt BB-; -- Convertible subordinated debt B; and -- Convertible trust preferred securities B. Moody's Investors Service downgraded to Ba2 from Ba1 the Corporate Family Rating of Alcatel S.A., which has completed its merger with Lucent Technologies Inc. and was renamed to Alcatel- Lucent. The ratings for senior debt of Alcatel were equally lowered to Ba2 from Ba1 and its Not-Prime rating for short-term debt was affirmed. At the same time, Moody's raised the ratings for senior debt of Lucent to Ba3 from B1 reflecting both the standalone credit profile of Lucent and, given the strategic importance of Lucent to round-off the group's product range and regional presence, expected financial support from Alcatel-Lucent, although this is not formally committed at this time. The ratings for the other legacy debt of Lucent were raised to B2 from B3 for subordinated debt and trust preferreds, and to P(B3) from P(Caa1) for preferred stock issuable under its shelf registration. Moody's has withdrawn Lucent's Corporate Family Rating of B1, assuming that management of the two entities will be fully integrated over the next several months and all of Lucent's non- US activities merged with their Alcatel counterparts. This should result in a rapid convergence of the credit risks of the affected companies. The outlook for all these ratings is stable. This rating action concludes the rating reviews initiated on April 3, 2006. Standard & Poor's, on Dec. 6, 2006, said that following news that the merger between French telecoms equipment supplier Alcatel and U.S. peer Lucent Technologies Inc. has received final approval from the U.S. Committee on Foreign Investments, it has lowered its long-term corporate credit and senior unsecured debt ratings on Alcatel -- now named Alcatel-Lucent -- to 'BB-' from 'BB', in line with its preliminary indication in its Nov. 7, 2006, research update. The 'B' short-term corporate credit rating on Alcatel-Lucent was affirmed. S&P said the outlook is positive. ALCATEL-LUCENT: Inks IP Network Contract with Hawaiian Telcom ------------------------------------------------------------- Hawaiian Telcom has selected Alcatel-Lucent's Triple Play Service Delivery Architecture as the blueprint for network transformation that will enable the delivery of new and innovative consumer and enterprise service offerings. Hawaiian Telcom will deploy Alcatel-Lucent's access and IP routing solutions to replace the existing high-speed Internet infrastructure, and to provide the scalability, reliability and speeds necessary to deliver compelling new service offerings such as IPTV, advanced and interactive Internet and premium Ethernet and IP VPN services. "By offering innovative and advanced services to our consumer, small business and enterprise customers, Hawaiian Telcom is strengthening its competitive position," Michael McHale, Chief Marketing Officer for Hawaiian Telcom, said. "The deployment of Alcatel-Lucent's Triple Play Service Delivery Architecture is a significant element of our ongoing network transformation strategy to IP-based technologies." "The transformation of operator networks is something that we continue to see in all regions around the world as our customers strive to maintain an edge in a competitive marketplace," Tim Krause, Alcatel-Lucent's Chief Marketing Officer, North America, said. "We are pleased to continue working with Hawaiian Telcom as it transforms its network and business in a way that will benefit both consumers and enterprises." Alcatel-Lucent will provide Hawaiian Telcom with its state-of- the-art ISAM product family a modular and flexible platform (including the Alcatel 7330 ISAM FTTN and the Alcatel 7342 ISAM FTTU) to extend the bandwidth potential of fiber from the network core to the subscriber premises, as well as the 7750 Service Router (SR) and Alcatel 7450 Ethernet Service Switch (ESS) to address its service routing requirements. Worldwide, more than 150 service providers in over 65 countries, including AT&T, BT, Telia Sonera, Telefonica and China Telecom, have selected the Alcatel IP portfolio. Alcatel-Lucent's ISAM product family is the industry's first IP broadband services access platform, accommodating a wide range of access technologies and network topologies. The ISAM family is specifically designed to minimize the complexity and ensure profitability as service providers transform their broadband access networks to support full triple play service adoption. In addition to Hawaiian Telecom, more than 100 service providers worldwide have chosen Alcatel-Lucent's ISAM family of products, including AT&T, China Telecom, Swisscom, and TELUS. About Hawaiian Telcom Hawaiian Telcom -- http://www.hawaiiantel.com/-- is the Hawaii's leading telecommunications provider, offering a wide spectrum of telecommunications products and services, which include local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end users. Through its operations in fixed, mobile and converged broadband networking, Internet protocol (IP) technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable communications services for people at home, at work and on the move. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * As reported in the TCR-Europe on Dec. 14, following the completion of Alcatel S.A.'s merger with Lucent Technologies Inc., at which time Alcatel was renamed Alcatel- Lucent, Fitch Ratings downgraded and removed Alcatel from Rating Watch Negative: -- Issuer Default Rating to BB from BBB-; and -- Senior unsecured debt to BB from BBB-. Alcatel's F3 short-term rating has also been withdrawn. The Rating Outlook for Alcatel-Lucent is Stable. Fitch has also withdrawn the following Lucent ratings due to the lack of clarity regarding Alcatel's support and, therefore, expected recovery of these securities in a distressed scenario: -- Issuer Default Rating BB-; -- Senior unsecured debt BB-; -- Convertible subordinated debt B; and -- Convertible trust preferred securities B. Moody's Investors Service downgraded to Ba2 from Ba1 the Corporate Family Rating of Alcatel S.A., which has completed its merger with Lucent Technologies Inc. and was renamed to Alcatel- Lucent. The ratings for senior debt of Alcatel were equally lowered to Ba2 from Ba1 and its Not-Prime rating for short-term debt was affirmed. At the same time, Moody's raised the ratings for senior debt of Lucent to Ba3 from B1 reflecting both the standalone credit profile of Lucent and, given the strategic importance of Lucent to round-off the group's product range and regional presence, expected financial support from Alcatel-Lucent, although this is not formally committed at this time. The ratings for the other legacy debt of Lucent were raised to B2 from B3 for subordinated debt and trust preferreds, and to P(B3) from P(Caa1) for preferred stock issuable under its shelf registration. Moody's has withdrawn Lucent's Corporate Family Rating of B1, assuming that management of the two entities will be fully integrated over the next several months and all of Lucent's non- U.S. activities merged with their Alcatel counterparts. This should result in a rapid convergence of the credit risks of the affected companies. The outlook for all these ratings is stable. This rating action concludes the rating reviews initiated on April 3, 2006. Standard & Poor's, on Dec. 6, 2006, said that following news that the merger between French telecoms equipment supplier Alcatel and U.S. peer Lucent Technologies Inc. has received final approval from the U.S. Committee on Foreign Investments, it has lowered its long-term corporate credit and senior unsecured debt ratings on Alcatel -- now named Alcatel-Lucent -- to 'BB-' from 'BB', in line with its preliminary indication in its Nov. 7, 2006, research update. The 'B' short-term corporate credit rating on Alcatel-Lucent was affirmed. S&P said the outlook is positive. =========== P O L A N D =========== AFFILIATED COMPUTER: Identifies US$51MM Addt'l. Non-Cash Expense ---------------------------------------------------------------- Affiliated Computer Services Inc. determined that the incremental cumulative non-cash compensation expense through June 30, 2006, related to incorrect accounting measurement dates is approximately US$51 million and that prior year financial statements will be restated. The determination was arrived at after it has completed the review and evaluation of the results of its internal investigation of its historical stock option practices. The company is currently reviewing the tax impact, including related interest and penalties, associated with stock options and other matters. The company's management made on Dec. 7, 2006, a presentation of its determination to the audit committee of its board of directors who concurred with and approved management's determination. Previously, the company disclosed that it was continuing to review and evaluate the results of the internal investigation and recent accounting guidelines established by the Securities and Exchange Commission to determine the accounting consequences of the use of incorrect measurement dates for certain stock option grants during the period from 1994 through 2005. The company's management is also currently evaluating the impact of the results of the internal investigation of its stock option practices on its internal control over financial reporting and disclosure controls and procedures. The company's management has already discussed the matter with the Audit Committee and PricewaterhouseCoopers LLP, the company's independent registered public accounting firm. Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland and Singapore. * * * As reported in the Troubled Company Reporter-Europe on Nov. 30, Standard & Poor's Ratings Services kept its ratings for Affiliated Computer Services Inc. including the 'B+' corporate credit rating, on CreditWatch, where they were placed with negative implications on Sept. 29, 2006. As reported in the TCR-Europe on Oct. 4, Moody's Investors Service placed the Ba2 ratings of Affiliated Computer Services on review for possible downgrade. The review for downgrade was prompted by the company's ongoing independent investigation into historical stock option practices, which has resulted in the company's delay in filing its 10-K for its fiscal year ended June 2006. The company has received certain waivers from credit facility lenders through Dec. 31 related to the options matter. The review will examine the company's access to internal and external sources of liquidity as well as the prospects for filing the June 10-K and subsequent financial statements with the SEC by Dec. 31. As part of this review, Moody's will assess the company's acquisition plans and contract commitments. If the company becomes current in the filing of its financial statements by Dec. 31 and any restatement is unlikely to result in a material cash outflow, the ratings will likely be confirmed at Ba2. Ratings Placed on Review for Possible Downgrade: * Ba2 Senior Secured Term Loan Rating * Ba2 Senior Secured Revolving Credit Facility Rating * Ba2 Senior Notes Rating (US$500 Million due 2010 and 2015) * Ba2 Corporate Family Rating EUROGAS INC: Sept. 30 Balance Sheet Upside-Down by US$41.1 Mln -------------------------------------------------------------- Eurogas Inc.'s balance sheet at Sept. 30, 2006, showed US$3.1 million in total assets and US$30.1 million in total liabilities, resulting in a US$41.1 million total stockholders' deficit. The company reported a US$10,160 net loss for the quarter ended Sept. 30, 2006, compared with a US$307,199 net loss for the same period in 2005. The company had no oil and gas sales for both periods. Management says the losses for both periods were due in large part to the absence of revenues, combined with continued administrative, interest, foreign exchange loss and other recurring continuing expenses. General and administrative expenses were US$ 0 for the three months ended Sept. 30, 2006, compared to US$269,435 for the three months ended Sept. 30, 2005. The decrease in administrative expenses is the result of the corporate inactivity of the company due to the Chapter 7 Bankruptcy. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?1728 About Eurogas Headquartered in Vancouver, Canada, Eurogas Inc. is primarily engaged in the acquisition of rights to explore for and exploit natural gas, coal bed methane gas, crude oil, talc and other minerals. The Company has acquired interests in several large exploration concessions and are in various stages of identifying industry partners, farming out exploration rights, undertaking exploration drilling, and seeking to develop production. The company has acquired interests in several large exploration concessions and is involved in operations in Central and Eastern Europe. Activities include a coalbed methane gas project in Poland and a natural gas project in Slovakia. Eurogas Inc. has been inactive since the company was put in chapter 7 by one of its US creditors. The company has impaired most of its oil and gas properties and the remaining assets have been put under the control of a bankruptcy trustee. Realization of the investment in properties and equipment is dependent upon the US Bankruptcy Court in Salt Lake City, Utah, releasing the company from chapter 7. Since all assets of the company were sold at an auction held by the US Bankruptcy Trustee in March 2006, proceeds in the amount of approximately US$800,000 are to be distributed by the Bankruptcy Trustee once he files his final report with the Bankruptcy Court in Salt Lake City and the presiding Judge approves of this repot. =============== P O R T U G A L =============== COMPANHIA SIDERURGICA: U.K. Regulator May Auction Corus in 2007 --------------------------------------------------------------- The contest between Tata Steel U.K. Limited and CSN Acquisitions Ltd. to acquire Corus Group Plc may turn into an auction if the company fails to name its buyer by Jan. 30, 2007, Bloomberg News reports. The Panel on Takeovers and Mergers said that it requires an auction procedure to determine Corus' buyer if the "competitive situation" between Tata Steel and CSN remains unresolved by the given date. CSN Bid As reported in the TCR-Europe on Dec. 13, CSN increased its purchase offer for Corus to US$9.6 billion or 515 pence a share, topping Tata Steel's 500 pence per share offer. Companhia Siderurgica's proposed purchase of Corus will be funded through a BP4.35 billion of debt underwritten by Barclays Plc, ING Groep NV and Goldman Sachs Group Inc., Bloomberg says, citing Chief Financial Officer Otavio Lazcano as saying. Meanwhile, Companhia Siderurgica promised to pay BP138 million to fund the deficit in the Corus Engineering Steels Pension Scheme, Bloomberg says. Also, the steelmaker will raise the contribution rate on the British Steel Pension Scheme to 12% from 10% until March 31, 2009. The company's success in acquiring Corus hinges on the unions' support, according to published reports. Tata Offer As reported in the TCR-Europe on Dec. 11, the Boards of Directors of Tata Steel Ltd. and Corus Group plc have agreed the terms of an increased recommended revised acquisition at a price of 500 pence in cash per Corus share. Under the terms of the Revised Acquisition, Corus shareholders will be entitled to receive 500 pence in cash for each Corus Share. This represents a price of 1,000 pence in cash for each Corus ADS. The terms of the Revised Acquisition value the entire existing issued and to be issued share capital of Corus at approximately GBP4.7 billion and the Revised Price represents: -- an increase of approximately 10% compared with 455 pence, being the Price under the original terms of the Acquisition; -- on an enterprise value basis, a multiple of approximately 7.5x EBITDA from continuing operations for the 12 months to Sept. 30, 2006 (excluding the non-recurring pension credit of GBP96 million) and a multiple of approximately 5.9x EBITDA from continuing operations for the year ended Dec. 31, 2005; -- a premium of approximately 38.7% to the average closing mid-market price of 360.5 pence per Corus Share for the 12 months ended Oct. 4, 2006, being the last business day before the announcement by Tata Steel that it was evaluating various opportunities including Corus; and -- a premium of approximately 22.7% to the closing mid-market price of 407.5 pence per Corus Share on Oct. 4, 2006, being the last business day before the announcement by Tata Steel that it was evaluating various opportunities Including Corus. The terms of the Revised Acquisition remain subject to the conditions and do not affect Tata Steel's intentions regarding the business of Corus, its management, employees and locations, nor the proposals relating to Corus's pension schemes, the Corus Share Schemes, Convertible Bonds or cancellation of the Deferred Shares. About Tata Steel Established in 1907, Tata Steel is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added). About Corus Group Corus Group plc, fka British Steel, was formed when the UK privatized its major steelworks in 1988. It then changed its name to Corus Group after acquiring most of Dutch rival Koninklijke Hoogovens. Corus makes coated and uncoated strip products, sections and plates, wire rod, engineering steels, and semi-finished carbon steel products. It also manufactures primary aluminum products. Customers include companies in the automotive, construction, engineering, and household-product manufacturing industries. Six years ago, the group suffered from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Portugal and the U.S. * * * Standard & Poor's Ratings Services affirmed on Aug. 4, 2006, its 'BB' long-term corporate credit rating on Brazil-based steel maker Companhia Siderurgica Nacional aka CSN after the announcement of its association with U.S.-based steel maker Wheeling-Pittsburgh Corp. in the U.S. The outlook is stable. Fitch Ratings viewed the proposed merger of Companhia Siderurgica Nacional's or CSN North American operations with those of Wheeling-Pittsburgh Corporation or WPSC to be neutral to CSN's credit quality. Fitch's ratings of CSN include: -- Foreign currency Issuer Default Rating: 'BB+'; -- Local currency IDR: 'BBB-'; -- National scale rating: 'AA (bra)'; -- Senior unsecured notes 'BB+'; and -- Brazilian Real denominated debentures: 'AA (bra)'. =========== R U S S I A =========== ALFA LLC: Perm Court Names A. Osmekhin as Insolvency Manager ------------------------------------------------------------ The Arbitration Court of Perm Region appointed Mr. A. Osmekhin as Insolvency Manager for LLC Engineering Enterprise Alfa. He can be reached at: A. Osmekhin Lenina Str. 72 B -11 614068 Perm Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A50-9945/2006-B. The Arbitration Court of Perm Region is located at: Lunacharskogo Str. 3 Perm Region Russia The Debtor can be reached at: LLC Engineering Enterprise Alfa 1905g. Str. 35 Perm Region Russia BRATSKOYE FREIGHT: Court Names S. Galandin as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Irkutsk Region appointed Mr. S. Galandin as Insolvency Manager for CJSC Bratskoye Freight Transport Enterprise #1. He can be reached at: S. Galandin Office 403 Dek. Sobytiy Str. 125 664007 Irkutsk Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A19-10772/01-8. The Arbitration Court of Irkutsk Region is located at: Room 303 Gagarina Avenue 70 664025 Irkutsk Region Russia The Debtor can be reached at: CJSC Bratskoye Freight Transport Enterprise #1 Radisheva Str. 1 Bratsk-3 Irkutsk Region Russia CHAINSKOYE CJSC: Court Names Ya. Gomerov as Insolvency Manager ------------------------------------------------------------- The Arbitration Court of Novosibirsk Region appointed Mr. Ya. Gomerov as Insolvency Manager for CJSC Chainskoye. He can be reached at: Ya. Gomerov Post User Box 325 Krasnoobsk 630501 Novosibirsk Region Russia Tel: 348-60-77 The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A45-11795/06-4/214. The Arbitration Court of Novosibirsk Region is located at: Kirova Str. 3 630007 Novosibirsk Region Russia The Debtor can be reached at: CJSC Chainskoye Chainka Kupinskiy Region Novosibirsk Region Russia LUKOIL OAO: ConocoPhillips to Hike Stake to 20% ----------------------------------------------- ConocoPhillips plans to increase its interest in OAO Lukoil to 20% by the end of the year as part of a strategic alliance announced in 2004. Lukoil also confirms that it reached definitive agreement with ConocoPhillips for the company to purchase 376 ConocoPhillips' fueling stations in six countries in Europe. The agreement covers: -- 156 stations in Belgium, -- 49 in Finland, -- 44 in the Czech Republic, -- 30 in Hungary, -- 83 in Poland and -- 14 in Slovakia. These stations are among the most efficient in their respective markets. At present, all facilities are branded Jet stations and will be re-branded as LUKOIL stations within two years. The transaction is expected to close in the second quarter of 2007 following review by relevant authorities. "This deal is in support of the Company's downstream strategy, which among other things envisages Lukoil's plans to considerably expand its retail chain in Europe and sell products with added value," Vagit Alekperov, President of Lukoil, said. "The announcement represents a significant step in achieving our asset disposition program, and we are pleased the transaction supports the business direction of both companies," Jim Mulva, chairman and chief executive officer of ConocoPhillips, said. The agreement reflects the strong and valued relationship between ConocoPhillips and Lukoil. About Lukoil Headquartered in Moscow, Russia, OAO Lukoil (LSE: LKOD; MICEX, RTS: LKOH) -- http://www.Lukoil.com/-- explores and produces oil & gas, petroleum products and petrochemicals, and markets the outputs. Most of the Company's exploration and production activity is located in Russia, and its main resource base is in Western Siberia. * * * As reported in the TCR-Europe on July 12, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Lukoil OAO to 'BB+' from 'BB'. S&P said the outlook is positive. MDM BANK: Sergey Popov Acquires 90% Shareholding ------------------------------------------------ MDM Bank disclosed of an agreement reached by its owners whereby Sergey Popov becomes the main investor in MDM Bank. He will own a 90% share in the Bank. Martin Andersson, member of MDM Bank's strategy committee, will acquire a 10% stake. Andrey Melnichenko, who has been a 50-50 owner of the Bank together with Mr. Popov, will discontinue his ownership in the Bank as part of a wider re-organization of his interests with Mr. Popov. This reorganization is subject to all relevant regulatory approvals. Mr. Popov has been one of MDM Bank's investors since 2003. As a member of MDM Bank's Board of Directors he was one of the architects of the Bank's strategy and of the development of its corporate governance system. Currently Mr. Popov sits on the Boards of MDM Bank, Russia's largest coal company, SUEK, and a leading agrochemical company, EuroChem. Mr. Andersson, a member of the Bank's Strategy committee since the first half of 2006, is a founding partner of the Brunswick Group. He was CEO and Chairman of Brunswick UBS Warburg, a leading Russian investment bank. About MDM Headquartered in Moscow, Russia, OJSC MDM Bank -- http://www.mdmbank.com/-- provides financial services organized across four divisions: corporate banking, retail banking, and investment banking. The bank owns and operates 100 offices throughout Russia. * * * As reported in the TCR-Europe on Nov. 30, Fitch Ratings changed the Outlooks of Russia-based MDM Bank's and its ultimate parent MDM Holding GmbH's Issuer Default ratings and National Long-term ratings to Positive from Stable. The agency also affirmed the ratings. MDM Bank: -- IDR and foreign currency senior unsecured debt: affirmed at BB-; Outlook revised to Positive from Stable; -- Subordinated debt: affirmed at B+; -- National Long-term rating and RUB senior unsecured debt: affirmed at A+; Outlook revised to Positive from Stable; -- Short-term rating affirmed at B; -- Individual rating: affirmed at C/D; and -- Support rating: affirmed at 4. MDM Holding GmbH: -- IDR: affirmed at BB-; Outlook revised to Positive from Stable; -- Short-term rating: affirmed at B; -- Individual rating: affirmed at C/D; and -- Support rating: affirmed at 5. As reported in the Troubled Company Reporter on March 14, Moody's Investors Service has assigned Ba2 and Not Prime long- and short-term foreign currency bank deposit ratings and a D Financial Strength Rating (FSR) to MDM Bank (Russia), which is the lead operating entity in MDM Financial Group (MDM FG), comprising over 90% of the group's total IFRS-consolidated assets and shareholders' equity. At the same time Moody's has affirmed the Ba2/Not Prime ratings assigned to MDM Bank's US$2 billion Program for the Issuance of Loan Participation Notes. The Notes will be issued by, but with limited recourse to, MDM International Funding Plc (Ireland) for the sole purpose of financing advances to MDM Bank. The outlook for all ratings is stable. According to Moody's, the Ba2/Not Prime/D ratings are based on the fundamental credit strength of MDM Bank, and do not incorporate any potential support from the authorities in case of need. MDM BANK: Fitch Affirms Sr. Unsec. Debt at BB- with Pos. Outlook ---------------------------------------------------------------- Fitch Ratings affirmed Russia-based MDM Bank's and its ultimate parent, MDM Holding GmbH's: * MDM Bank: -- Issuer Default rating and foreign currency senior unsecured debt: affirmed at 'BB-' (BB minus); IDR Outlook Positive. -- Subordinated debt: affirmed at 'B+'. -- National Long-term rating and RUB senior unsecured debt: affirmed at 'A+(rus)'; Long-term rating Outlook Positive. -- Short-term rating affirmed at 'B'. -- Individual rating: affirmed at 'C/D'. -- Support rating: affirmed at '4'. * MDM Holding GmbH: -- IDR: affirmed at 'BB-' (BB minus); Outlook Positive. -- Short-term rating: affirmed at 'B'. -- Individual rating: affirmed at 'C/D'. -- Support rating: affirmed at '5'. The affirmation follows the announcement of an agreement reached by MDM Bank's owners whereby Sergey Popov becomes the main investor in MDM Bank. He will own a 90% share in the Bank. Martin Andersson, member of MDM Bank's strategy committee, will acquire a 10% stake. Andrey Melnichenko, who has been a 50-50 owner of the Bank together with Mr. Popov, will discontinue his ownership in the Bank as part of a wider re-organization of his interests with Mr. Popov. This reorganization is subject to all relevant regulatory approvals. Fitch says that corporate governance improvements at MDM Bank, which have included the gradual withdrawal from the bank's day- to-day management by Mr. Melnichenko, the creation of appropriate committee structures and the formation of an experienced executive team under CEO Mr. Michel Perhirin, should ensure minimal disruption to the bank's business. Mr. Melnichenko is to remain a member of MDM Bank's Board of Directors at present. Fitch understands that MDM Bank's strategy to push more comprehensively into the middle-market retail and SME segments, including in the Russian regions, will not be affected by the ownership change. The change in ownership has been structured largely as an asset swap between the two parties and Fitch has been assured that no leverage is required to effect the transaction. MDM Bank relies very heavily on wholesale sources of funds. Fitch considers that the change in ownership should not materially affect MDM Bank's access to funding, nor its funding costs. However, it is difficult to predict the intentions of the numerous interested parties and it is an area that Fitch will monitor closely. MDM Bank is by far the largest subsidiary of MDM Holding GmbH and is Russia's 10th largest bank by assets. MDM Holding GmbH had consolidated assets of RUB210 billion and consolidated equity of RUB29bn at end-September 2006. Operating return on average equity was 19.5% for first nine months of 2006, a little lower than the 22% achieved in first nine months of 2005, a period that benefited from exceptionally low impairment charges and high trading gains. METROMEDIA INT'L: Files 2004 Annual Report with U.S. SEC -------------------------------------------------------- Metromedia International Group Inc. has filed with the U.S. Securities and Exchange Commission its 2004 Annual Report on Form 10-K. With the filing of the 2004 Form 10-K, the Company has completed a significant step in the restatement process that began in June 2005 and the Company is working diligently on completing and filing with the SEC its outstanding Quarterly Reports on Form 10-Q for the fiscal periods ended March 31, June 30 and Sept. 30, 2005 and 2006 and its outstanding Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2005. The Company cannot at this time provide any assurances as to when these outstanding periodic reports will be completed and filed with the SEC. About Metromedia Based in Charlotte, North Carolina, Metromedia International Group (PINK SHEETS: MTRM-Common Stock and MTRMP-Preferred Stock) -- http://www.metromedia-group.com/-- through its subsidiary, Metromedia International Telecommunications, owns interests in telecom and cable TV operations in Russia, Georgia, and elsewhere in Eastern Europe. The Company's core businesses includes Magticom, Ltd., the leadingmobile telephony operator in Tbilisi, Georgia, and Telecom Georgia, a well-positioned Georgian long distance telephone operator. * * * In October 2006, Metromedia said it is filing a Chapter 11 Plan in the U.S. after receiving a binding offer to acquire all of the Company's business interests in Georgia for a cash price of US$480 million from an investment group comprised of: -- Istithmar, an alternative investment house based in Dubai, United Arab Emirates; -- Salford Georgia, the Georgian office of Salford Capital Partners Inc., a private equity and investment management company which manages investments in the CIS and Central & Eastern Europe; and -- Emergent Telecom Ventures, a communications merchant bank focused on pursuing telecommunications opportunities in the Emerging Markets. Upon the approval of the plan, all of the preferred and common equity interests in the Company will be converted into the right to receive the cash remaining after payment of all allowed claims and the costs and expenses associated with the sale and the Wind-Up. Moody's Investors Service has placed Metromedia's subordinated debt rating at B3 and junior subordinated debt rating at B2. MOTORIST OJSC: Rostov Bankruptcy Hearing Slated for Feb. 6 ---------------------------------------------------------- The Arbitration Court of Rostov Region will convene on Feb. 6, 2007, to hear the bankruptcy supervision procedure on OJSC Motorist (TIN 6147005560). The case is docketed under Case No. A53-12847/06-S2-30. The Temporary Insolvency Manager is: A. Afanasyeva Voroshilova 5 1-2 Shakhty 346527 Rostov Region Russia The Arbitration Court of Rostov Region is located at: Stanislavskogo Str. 8a 344008 Rostov-na-Donu Russia The Debtor can be reached at: OJSC Motorist Polevoy Per. 43 Kamensk-Shakhtinskiy 347800 Rostov Region Russia NORTH-METAL CJSC: Court Names S. Kovalev as Insolvency Manager -------------------------------------------------------------- The Arbitration Court of St. Petersburg and Leningrad Region appointed Mr. S. Kovalev as Insolvency Manager for CJSC North- Metal. He can be reached at: S. Kovalev Office 1305 Building 1 16th liniya of V.O. 7 199034 St-Petersburg V.O. Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A56-14668/2006. The Arbitration Court of St. Petersburg and the Leningrad Region is located at: Hall 113 Suvorovskiy Pr. 50/52 St. Petersburg Region Russia The Debtor can be reached at: CJSC North-Metal Lodygina Str. 1/28 190103 St. Petersburg Region Russia NOVOCHERKASSKIY LIQUEUR-VODKA: Court Hearing Slated for March 5 --------------------------------------------------------------- The Arbitration Court of Rostov Region will convene at 2:30 p.m. on March 5 to hear the bankruptcy supervision procedure on OJSC Novocherkasskiy Liqueur-Vodka Distillery. The case is docketed under Case No. A53-16736/06-S1-8. The Temporary Insolvency Manager is: S. Kozlov Buynakskaya Str. 2/56 344037 Rostov-na-Donu Russia The Arbitration Court of Rostov Region is located at: Stanislavskogo Str. 8a 344008 Rostov-na-Donu Russia The Debtor can be reached at: OJSC Novocherkasskiy Liqueur-Vodka Distillery Ermaka Pr. 5 Novocherkassk 346429 Rostov Region Russia ORLOVSKOYE OJSC: Court Names V. Volgin as Insolvency Manager ------------------------------------------------------------ The Arbitration Court of Voronezh Region appointed Mr. V. Volgin as Insolvency Manager for OJSC Orlovskoye. He can be reached at: V. Volgin Apartment 39 Mira Str. 6 394000 Voronezh Region Russia Tel: 8(4732) 51-24-67 The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A14-6780-2006/33b. The Arbitration Court of Voronezh Region is located at: Room 606 Srednemoskovskaya Str. 77 Voronezh Region Russia The Debtor can be reached at: OJSC Orlovskoye Orlovka Talovskiy Region Voronezh Region Russia POSEVNINSKAYA LLC: Bankruptcy Hearing Slated for January 15 ----------------------------------------------------------- The Arbitration Court of Novosibirsk Region will convene at 3:00 p.m. on Jan. 15, 2007, to hear the bankruptcy supervision procedure on LLC Poultry Farm Posevninskaya. The case is docketed under Case No. A45-16905/06-4/339. The Temporary Insolvency Manager is: A. Tyutyunik Partizanskaya Str. 23 Cherepanovo 633520 Novosibirsk Region Russia Tel./Fax: 8-383-245-21-797 The Arbitration Court of Novosibirsk Region is located at: Kirova Str. 3 630007 Novosibirsk Region Russia The Debtor can be reached at: LLC Poultry Farm Posevninskaya Promyshlennaya Str. 1 a Posevnaya Cherepanovskiy Region 633511 Novosibirsk Region Russia SEL-KHOZ-TEKHNIKA OJSC: Court Starts Bankruptcy Supervision ----------------------------------------------------------- The Arbitration Court of Murmansk Region commenced bankruptcy supervision procedure on OJSC Sel-Khoz-Tekhnika (TIN/KPP 5105040345/510501001). The case is docketed under Case No. A42-2908/2006. The Temporary Insolvency Manager is: A. Arendarchuk Post User Box 113 183012 Murmansk Region Russia The Arbitration Court of Murmansk Region is located at: Knipovicha Str. 20 Murmansk Region Russia The Debtor can be reached at: OJSC Sel-Khoz-Tekhnika Andrusenko Str. 10 Kola 184380 Murmansk Region Russia SERDOBSKIY BRICKWORKS: Court Names A. Makarov to Manage Assets -------------------------------------------------------------- The Arbitration Court of Penza Region appointed Mr. A. Makarov as Insolvency Manager for OJSC Serdobskiy Brickworks. He can be reached at: A. Makarov K. Marksa Str. 26 440026 Penza Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A49-2516/06-258b/3. The Arbitration Court of Penza Region is located at: Belinskogo Str. 2 440600 Penza Region Russia The Debtor can be reached at: OJSC Serdobskiy Brickworks Belinskogo Str. 35 Serdobsk Penza Region Russia SEVERSTAL OAO: Gains RUR24.8 Billion from New Share Issue --------------------------------------------------------- OAO Severstal has completed the placement of its additional shares, RosBusinessConsulting reports. The company raised around RUR24.83 billion after placing a total of 76,916,692 shares at RUR322.81 per share. Company shareholders exercised their pre-emptive rights to acquire 90.49% of the additional share issue. Severstal was unable to sell its shares to other buyers at RUR332.74, RBC relates. About Severstal Headquartered in Cherepovets, Russia, OAO Severstal -- http://www.severstal.com/-- is the country's largest steel producer, with steel production of 17.1 million tons in 2005. The Company owns Severstal North America, the fifth largest integrated steel maker in the U.S. with 2005 production of 2.7 million tons, and Lucchini, Italy's second largest steel group with 2005 production of 3.5 million tons. Severstal is one of the world's lowest cost and most profitable steel producers, with 2005 EBITDA per ton of around EUR150 per ton. As of Dec. 31, 2005, Severstal had US$10.75 billion in total assets, US$3.66 billion in total liabilities and US$7.09 billion in total shareholders' equity. * * * As reported in the TCR-Europe on July 5, Standard & Poor's Ratings Services kept its 'B+' long-term corporate credit rating on Russian steelmaker OAO Severstal on CreditWatch with positive implications following the consolidation of the company's mining assets. The rating was placed on CreditWatch on May 26, following the announcement of a previously agreed merger between Severstal and Luxembourg-based steelmaker Arcelor S.A. This merger was cancelled on June 30. As reported in the TCR-Europe on June 28, Fitch Ratings maintained the Rating Watch Positive status for OAO Severstal's ratings of Issuer Default BB-, senior unsecured BB-, Short-term B and National Long-term A+. Severstal, which recently raised just over US$1 billion placing shares in London, plans to acquire more assets on the way to becoming the world's second-largest steel maker, its 41-year-old billionaire owner, Alexei Mordashov, has said. SEVERSTAL OAO: Appoints Five Non-Executive Directors to Board ------------------------------------------------------------- OAO Severstal disclosed that all the resolutions were passed at the company's Dec. 15 Extraordinary General Meeting, including those in relation to the appointments to the Board of Directors. These appointments are made as part of Severstal's new corporate governance arrangements designed to comply with the key elements of the U.K.'s corporate governance standards. Following these appointments, Severstal will have a 10-person Board. Five Executive Directors: -- Alexey Mordashov, -- Mikhail Noskov, -- Vadim Makhov, -- Anatoliy Kruchinin, and -- Vadim Shvetsov. Five Independent Non-Executive Directors: -- Chris Clark, Independent Director and Non-executive Chairman of the Board; -- Martin Angle, Independent Director; -- Rolf Stomberg, Senior Independent Director; -- Ron Freeman, Independent Director; and -- Dr Peter Kraljic, Independent Director. The first meeting of the Board of Directors was held immediately after the Extraordinary General Meeting. The Board of Directors has elected Chris Clark as the Chairman of the Board and appointed Chairmen and members of Audit and Remuneration committees. About Severstal Headquartered in Cherepovets, Russia, OAO Severstal -- http://www.severstal.com/-- is the country's largest steel producer, with steel production of 17.1 million tons in 2005. The Company owns Severstal North America, the fifth largest integrated steel maker in the U.S. with 2005 production of 2.7 million tons, and Lucchini, Italy's second largest steel group with 2005 production of 3.5 million tons. Severstal is one of the world's lowest cost and most profitable steel producers, with 2005 EBITDA per ton of around EUR150 per ton. As of Dec. 31, 2005, Severstal had US$10.75 billion in total assets, US$3.66 billion in total liabilities and US$7.09 billion in total shareholders' equity. * * * As reported in the TCR-Europe on July 5, Standard & Poor's Ratings Services kept its 'B+' long-term corporate credit rating on Russian steelmaker OAO Severstal on CreditWatch with positive implications following the consolidation of the company's mining assets. The rating was placed on CreditWatch on May 26, following the announcement of a previously agreed merger between Severstal and Luxembourg-based steelmaker Arcelor S.A. This merger was cancelled on June 30. As reported in the TCR-Europe on June 28, Fitch Ratings maintained the Rating Watch Positive status for OAO Severstal's ratings of Issuer Default BB-, senior unsecured BB-, Short-term B and National Long-term A+. SLAVINVESTBANK LLC: Fitch Rates US$100-Million Notes at B- ---------------------------------------------------------- Fitch Ratings assigned Slavinvest Finance SA's US$100 million 9.875% loan participation notes due 2009 a final Long-term 'B-' rating and a final Recovery Rating 'RR4'. The issue's Long-term rating is placed on Rating Watch Positive. The notes are to be used for the sole purpose of financing a loan to Slavinvestbank LLC, which is rated Issuer Default 'B-', Short-term 'B', Individual 'D/E', Support '5' and National Long- term 'BB+(rus)'. The bank's Issuer Default, Support and National Long-term ratings are on Rating Watch Positive. The final prospectus (as of Dec. 15, 2006) contains additional clause specifying that the notes may be redeemed at the option of the noteholders at their principal amount, together with accrued interest to the date of redemption, following the occurrence of a put event. The latter is defined as: (i) a change of control which results in a rating decline; or (ii) a failure to obtain ownership and control deemed as to have occurred if, by June 21, 2008, Bank TuranAlem has not acquired direct ownership and control of a controlling stake in SIB. Slavinvestbank LLC is a small-sized universal bank, accounting for about 0.2% of system assets, which operates through 17 branches and additional offices in Russia. About 16% of the bank's voting shares are directly owned by the second largest bank in Kazakhstan, BTA (rated Foreign Currency Issuer Default 'BB+', Foreign Currency Short-term 'B', Individual 'C/D', Support '3'). The remaining 84% of shares are held by a number of formal shareholders who have passed their shares in the trust of TuranAlem Capital. VNESHTORGBANK JSC: Eyes US$4.6 Billion Fresh Capital in 2007 IPO ---------------------------------------------------------------- JSC Vneshtorgbank aims to raise up to RUB120 billion from its planned initial public offering in 2007, Bloomberg News reports. VTB will offer to the public 20% to 22% of its total shares, which could earn around RUR90-RUR120 billion for the company, Economy Minister German Gref said in a televised government meeting. As reported in the TCR-Europe on Dec. 6, the Russian government eyes beneficial terms for initial public offerings of state- controlled banks OAO Sberbank Rossii and Vneshtorgbank. As reported, the government plans an IPO for Sberbank in the first quarter of 2007, and for Vneshtorgbank in the second quarter. Russia intends to gradually reduce its holdings in the two banks. Mr. Gref said VTB's IPO will occur in May or June 2007, after President Vladimir Putin signs the necessary decree. Bloomberg suggests that Russian banks are raising capital to boost lending as the country enters a ninth year of economic expansion and embarks on a multibillion-dollar overhaul of Soviet-era infrastructure. The need for capital will swell in 2007, thus investors are encouraged to invest in state-owned institutions like OAO Sberbank, Renaissance Capital investment bank told Bloomberg News. Sberbank is seeking to raise around US$7 billion in 2007 via a secondary share sale to raise its legal lending limit. About Vneshtorgbank Headquartered in Moscow, Russia, JSC Vneshtorgbank -- http://www.vtb.ru/-- offers a wide range of banking services and conducting operations in both Russian and international markets. As of Dec. 31, 2005, the Group had a network of 151 branches, including 55 branches of VTB, 42 branches of VTB Retail Services and 54 branches of Industry and Construction Bank, located in major Russian regions. The Group operates through three subsidiaries located in the CIS (Armenia, Georgia, Ukraine), seven subsidiaries located in Western Europe (Austria, Cyprus, Switzerland, Germany, Luxembourg, France) and Great Britain and through five representative offices located in India, Italy, China, Byelorussia and Ukraine. VNESHTORGBANK JSC: Fitch Affirms Individual Rating at C/D --------------------------------------------------------- Fitch Ratings affirmed the ratings of Russia-based JSC Vneshtorgbank and its London-, Paris- and Cyprus-based subsidiaries, respectively VTB Europe plc, VTB Bank France SA. and Russian Commercial Bank (Cyprus), at: * JSC Vneshtorgbank: -- Foreign currency Issuer Default rating: 'BBB+', Short-term foreign currency 'F2', Individual 'C/D', Support '2', National Long-term 'AAA(rus)', Local currency IDR 'BBB+'. The Outlooks on the bank's IDRs and National Long-term rating are Stable. VTB's IDRs, Short-term and Support ratings are underpinned by its majority state ownership, importance to the Russian banking system, and Fitch's view of the high probability of support from the Russian state in case of need. However, the bank's support floor continues to depend on its status, ownership and importance to the Russian banking system. Upside potential for the Individual rating is currently limited given VTB's exposure to political risk, pressured capitalization, transparency issues surrounding the bank's largest credit exposures and increasing operational and credit risks. * VTB Europe plc: -- Foreign currency IDR 'BBB', Short-term foreign currency, 'F3', Individual 'C' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. In light of VTBE's 89%-owner, VTB, which is Russia's second largest, state-owned bank, as well as the comfort letter Fitch understands that VTB has provided to the UK's Financial Services Authority in respect of VTBE (which although not legally binding provides a strong moral obligation to support VTBE), there is a high probability that support for VTBE would be forthcoming from VTB, if needed, flowing ultimately from the Russian state. Fitch does not expect an upgrade of VTBE's Individual rating in the near future. Downward movement could result from failure to offset revenue pressures, a decline in asset quality or an increase in risk appetite. * VTB Bank France SA.: -- Foreign currency IDR 'BBB', Short-term foreign currency 'F3', Individual 'C/D' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. The Issuer Default, Short-term and Support ratings of VTBF reflect Fitch's view of the high probability of support from VTB, if needed, flowing ultimately from the Russian government. This is based on VTBF's 87%- ownerhip by VTB, as well as the assurances provided by VTB to the French authorities in respect of VTBF's solvency and by the Central Bank of Russia (VTBF's former majority owner) in respect of VTBF's liquidity (up until end-2007). Fitch does not expect an upgrade of VTBF's Individual rating in the near future. However, downward movement could result from failure to offset revenue pressures or should VTB channel upstream a large amount of capital from VTBF. * Russian Commercial Bank (Cyprus): Foreign currency IDR 'BBB', Short-term foreign currency 'F3' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. RCBC's Individual rating of 'D/E' is affirmed and withdrawn. RCBC's ratings reflect the high probability of support being forthcoming from its 100% shareholder, VTB, in case of need. Under the terms of RCBC's banking license granted by the Cypriot authorities, its obligations are guaranteed by VTB in the case of RCBC being wound up. However, in light of possible timeliness issues relating to enforcement of the guarantee, and also its cross-border nature, Fitch maintains a one-notch differential between the ratings of VTB and RCBC. The withdrawal of RCBC's Individual rating reflects the extent of integration between RCBC and its parent, which makes an analysis of RCBC on a standalone basis difficult. Fitch is informed that RCBC will remain a direct subsidiary of VTB for the foreseeable future, notwithstanding the ongoing restructuring of VTB's western European subsidiaries. Founded in 1990, VTB is Russia's second-largest bank by assets and equity. Historically a corporate bank, it is also aggressively expanding its domestic small and mid-sized enterprise and retail banking operations. VTB's strategy is to become a mid-sized European bank. Following a number of acquisitions, VTB group comprises three major Russian banks, seven banks in Western Europe, including VTBE and VTBF (both acquired at end-2005) and RCBC, and four banks in CIS countries. It also has offices in Africa and plans to open new offices in Asia. VNESHTORGBANK JSC: Inks Syndicated Factoring Project with NFC ------------------------------------------------------------- JSC Vneshtorgbank and the National Factoring Company launched a Syndicated Factoring joint project. Cooperation of key players in the banking and factoring markets suggests that the parties join together their efforts to ensure expanded access of trade and manufacturing companies to high quality factoring services. Within the framework of the project, VTB and NFC will deliver joint factoring services to customers under tripartite agreements to be entered into between VTB, NFC and the customer. And VTB will be engaged in preliminary marketing, negotiating with companies interested in factoring, handling of customers so as to gather the package of documents needed for the transaction, accepting original documents and a 100% funding. In its turn, NFC will undertake to arrange sales, to offer customer consulting, to discount monetary claims, manage customer's accounts receivable and ensure safety of customers against credit risks (debtor default risks). The Commercial Factoring line of products to be offered within the framework of this project comprises financing for deferred payment deliveries under the Factoring-Finance, coverage of credit risks under the Factoring-Guarant, and receivables assessment and management under the Factoring-Signal. Partnership of the two companies which are leaders of the Russian financial market redoubles the opportunities to elaborate unique offers for the consumer both in terms of contents and quality of the services, and in terms of competitive pricing offer formation. Alliance between VTB and NFC in this project will enable the Bank to diversify the existing line of products by a comprehensive package of factoring services and at the same time to avoid costs related to any factoring infrastructure. In its turn, NFC will have access to funding and an opportunity to increase business volumes by tapping resources of the vast regional network of the VTB Group. Joint efforts of the Bank and the Company will allow the two parties to gain strong leadership in the Russian financial market, and will result in a broader popularity of the commodity lending among households. Through diversification of its activities, VTB continues expanding its range of transactions carried out in the Russian market and delivers its customers a wide range of financial instruments recognized in international banking practice. In addition to conventional banking services, VTB offers its customers cooperation with its subsidiaries and partners. To illustrate, in 2002, the Bank founded VTB-Leasing engaged in financial lease of manufacturing machinery, motor vehicles; computer, office and trade equipment; real estate and others to large- and medium-sized companies. Developing such business lines on a comprehensive basis enables Russian enterprises to open new opportunities for further growth and for an efficient finance management system. The National Factoring Company is the first independent professional factoring company in Russia holding leadership positions in the Russian market. About Vneshtorgbank Headquartered in Moscow, Russia, JSC Vneshtorgbank -- http://www.vtb.ru/-- offers a wide range of banking services and conducting operations in both Russian and international markets. As of Dec. 31, 2005, the Group had a network of 151 branches, including 55 branches of VTB, 42 branches of VTB Retail Services and 54 branches of Industry and Construction Bank, located in major Russian regions. The Group operates through three subsidiaries located in the CIS (Armenia, Georgia, Ukraine), seven subsidiaries located in Western Europe (Austria, Cyprus, Switzerland, Germany, Luxembourg, France) and Great Britain and through five representative offices located in India, Italy, China, Byelorussia and Ukraine. * * * Following the recent upgrade of the Russian sovereign foreign and local currency IDRs to BBB+ from BBB, Fitch ratings lifted Vneshtorgbank's Upgraded to foreign currency and local currency IDR to BBB+ from BBB with a Stable Outlook and Short-term to F2 from F3. Fitch also affirmed the Individual rating at C/D and Support at 2. Fitch also upgraded Vnesheconombank IDR rating to BBB+ from BBB with a Stable Outlook; and Short-term to F2 from F3. Fitch affirmed the Support rating at 2. VODOPYANOVSKOYE OJSC: Bankruptcy Hearing Slated for March 15 ------------------------------------------------------------ The Arbitration Court of Tambov Region will convene on March 15 to hear the bankruptcy supervision procedure on OJSC Vodopyanovskoye. The case is docketed under Case No. A-57-658B/ 06-31. The Temporary Insolvency Manager is: M. Kuvshinova Shmidta Str. 4 440039 Penza Region Russia The Debtor can be reached at: OJSC Vodopyanovskoye Vodopyanovka Marksiovskiy Region Saratov Region Russia WEST-URAL CRANE FACTORY: Bankruptcy Hearing Slated for March 19 --------------------------------------------------------------- The Arbitration Court of Perm Region will convene on March 19 to hear the bankruptcy supervision procedure on LLC West-Ural Crane Factory. The case is docketed under Case No. A50-15831/06-B. The Temporary Insolvency Manager is: I. Pismanik Post User Box 7645 614007 Perm Region Russia The Arbitration Court of Perm Region is located at: Lunacharskogo Str. 3 Perm Region Russia The Debtor can be reached at: LLC West-Ural Crane Factory Bytovoy Per. 30 Stroiteley Location Kizel Perm Region Russia WOODWORKING FACTORY CJSC: Tomsk Court Names Insolvency Manager -------------------------------------------------------------- The Arbitration Court of Tomsk Region appointed Mr. S. Lizunov as Insolvency Manager for CJSC Woodworking Factory. He can be reached at: S. Lizunov Govorova Str. 1A 634057 Tomsk Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A67-8054/06. The Debtor can be reached at: CJSC Woodworking Factory Yurtochnyj Per. 2-3 Tomsk Region Russia WOODWORKING FACTORY OJSC: Court Taps S. Chashin to Manage Assets ---------------------------------------------------------------- The Arbitration Court of St. Petersburg and Leningrad Region appointed Mr. S. Chashin as Insolvency Manager for OJSC Woodworking Factory. He can be reached at: S. Chashin Post User Box 15 191024 St. Petersburg Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A56-42871/2005. The Arbitration Court of St. Petersburg and the Leningrad Region is located at: Hall 113 Suvorovskiy Pr. 50/52 St. Petersburg Russia The Debtor can be reached at: OJSC Woodworking Factory Naziya Kirovskiy Region 187310 Leningrad Region Russia ========= S P A I N ========= MADRID RMBS II: Fitch Rates EUR18.9 Million Class E Notes at BB+ ---------------------------------------------------------------- Fitch Ratings assigned final ratings to Madrid RMBS II, Fondo de Titulizacion de Activos EUR1.8 billion mortgage-backed floating- rate notes: -- EUR414 million Class A1 due in August 2049: 'AAA'; -- EUR936 million Class A2 due in August 2049: 'AAA'; -- EUR270 million Class A3 due in August 2049: 'AAA'; -- EUR63 million Class B due in August 2049: 'AA'; -- EUR67.5 million Class C due in August 2049: 'A'; -- EUR30.6 million Class D due in August 2049: 'BBB' and -- EUR18.9 million Class E due in August 2049: 'BB+'. This transaction is a cash flow securitization of a EUR1.8bn static pool of first-ranking residential mortgage loans granted by Caja de Ahorros y Monte de Piedad de Madrid (rated 'AA-' (AA minus)/'F1+'). The final ratings are based on the quality of the collateral, the underwriting and servicing capabilities of the seller, available credit enhancement, the integrity of the transaction's legal and financial structure and Titulizacion de Activos, S.G.F.T., S.A.'s administrative capabilities. The final ratings address payment of interest on the notes according to the terms and conditions of the documentation, subject to a deferral trigger on the Class B, C, D and E notes, as well as the repayment of principal by legal final maturity for each note. The fund is regulated by Spanish Securitization Law 19/1992 and Royal Decree 926/1998. Its sole purpose is to convert mortgage transmission certificates (certificados de transmision de hipotecas from the seller into fixed-income securities. The fund is legally represented and managed by TdA, a limited liability company incorporated under Spanish law, whose activities are limited to the management of securitization funds. ===================== S W I T Z E R L A N D ===================== BALLFIRE LLC: St. Gallen Court Starts Bankruptcy Proceedings ------------------------------------------------------------ The Bankruptcy Court of St. Gallen commenced bankruptcy proceedings against LLC Ballfire on Oct. 24. The Debtor can be reached at: LLC Ballfire Im Grund 16 9012 St. Gallen Switzerland The Bankruptcy Service of St. Gallen can be reached at: Bankruptcy Service of St. Gallen Max Banziger 9001 St. Gallen Switzerland BDS FINANCE-SERVICES: Zug Court Closes Bankruptcy Proceedings ------------------------------------------------------------- The Bankruptcy Court of St. Gallen entered Nov. 3 an order closing the bankruptcy proceedings of JSC BDS Finance-Services. The Debtor can be reached at: JSC BDS Finance-Services Alte Steinhauserstrasse 35 6330 Cham Zug Switzerland The Bankruptcy Service of Zug can be reached at: Bankruptcy Service of Zug 6300 Zug Switzerland CW CARAVAN: Berne Court Starts Bankruptcy Proceedings ----------------------------------------------------- The Bankruptcy Court of Emmental-Oberaargau and Control of Debt Payment commenced bankruptcy proceedings against JSC CW Caravan Waibel on Sept. 28. The Debtor can be reached at: JSC CW Caravan Waibel Hindelbankstrasse 38 3321 Schonbuhl Switzerland The Bankruptcy Service of Emmental-Oberaargau can be reached at: Bankruptcy Service of Emmental-Oberaargau Administrative Department Burgdorf, 3401 Burgdorf Berne Switzerland DHMN JSC: Thurgau Court Suspends Bankruptcy Proceedings ------------------------------------------------------- The Bankruptcy Service of Thurgau suspended the bankruptcy proceedings of JSC DHMN on Nov. 23, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF4,000 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on Oct. 24, can be reached at: JSC DHMN Hohliberg 9/Postfach 8503 Frauenfeld Thurgau Switzerland The Bankruptcy Service of Thurgau can be reached at: Bankruptcy Service of Thurgau 8510 Frauenfeld Thurgau Switzerland DREILINDEN LANGENTHAL: Berne Court Starts Bankruptcy Proceedings ---------------------------------------------------------------- The Bankruptcy Court of Emmental-Oberaargau Eyhalde 2 and Control of Debt Payment commenced bankruptcy proceedings against JSC Dreilinden Langenthal on Sept. 25. The Debtor can be reached at: JSC Dreilinden Langenthal Aarwangenstrasse 4 4900 Langenthal Berne Switzerland The Bankruptcy Service of Emmental-Oberaargau Eyhalde 2 can be reached at: Bankruptcy Service of Emmental-Oberaargau Eyhalde 2 4912 Aarwangen Berne Switzerland LANNA GASTRO: Thurgau Court Starts Bankruptcy Proceedings --------------------------------------------------------- The Bankruptcy Court of Thurgau commenced bankruptcy proceedings against JSC Lanna Gastro on Sept. 29. The Debtor can be reached at: JSC Lanna Gastro Wilenstrasse 11a 9322 Egnach Switzerland The Bankruptcy Service of Thurgau can be reached at: Bankruptcy Service of Thurgau 8510 Frauenfeld Thurgau Switzerland POLYTECH SUISSE: Berne Court Starts Bankruptcy Proceedings ---------------------------------------------------------- The Bankruptcy Court of Emmental-Oberaargau and Control of Debt Payment commenced bankruptcy proceedings against JSC Polytech Suisse on Oct. 11. The Debtor can be reached at: JSC Polytech Suisse Kirchgasse 13 4932 Lotzwil Berne Switzerland The Bankruptcy Service of Emmental-Oberaargau can be reached at: Bankruptcy Service of Emmental-Oberaargau Admistrative Department Aarwangen 4912 Aarwangen Berne Switzerland TECH DATA: Moody's Rates Proposed US$350-Mln Sr. Notes at Ba2 ------------------------------------------------------------- Moody's Investors Service assigned a Ba2 to Tech Data Corporation's proposed offering of up to US$350 million convertible senior notes due 2026 and affirmed its existing ratings. The net proceeds from the offering will be used primarily to pay down Tech Data's higher interest bearing intra-quarter debt and enhance the company's liquidity position. The rating reflects both the overall probability of default of the company under Moody's LGD framework, to which Moody's affirms its PDR of Ba1, and a loss-given-default of LGD-6 for the convertible senior notes. The ratings outlook remains negative. This report is not viewed as a change in the company's overall financial policies and Moody's notes that at the current rating level of Ba1, the company has modest debt capacity. Additionally, Tech Data is expected to save approximately US$9 million in annual net interest expense through this offering. In May 2005, Tech Data implemented a restructuring program to improve the cost structure and productivity of its EMEA operations. The company has incurred US$55 million of total cash restructuring costs, which should generate annualized cost savings of the same amount. It is Moody's understanding that Tech Data has completed the restructuring program and expects no further cash charges. Moody's most recent rating action on Tech Data occurred on March 15, 2006, when Moody's affirmed Tech Data's ratings and revised the outlook to negative from stable. This was due to increasing competitive pricing pressures, steady gross margin decline, continued weakness in the EMEA operations and weakened operating profitability on a year-over-year basis. Tech Data's operating performance for the trailing twelve months ending in October 2006 was weak with a gross margin of 4.5% compared to 5% in fiscal 2006 and operating margin of 0.7% versus 0.8% in the prior year. Tech Data's margins, which have continued to trend down over a multi-year period across several cycles, are thinner than its peer distributors. Moody's notes that if the earnings were to experience further weakening from current levels, the EMEA business continued to exhibit weak operating results despite the restructuring efforts or gross cash flow migrates below historical levels, Moody's would likely downgrade the corporate family rating. To the extent the company experiences a reversal of margin trends and benefits from the EMEA restructuring actions, resulting in operating performance that returns to historical levels, Moody's could stabilize the CFR. These new ratings and assessments were assigned: -- up to US$350 million Convertible Senior Unsecured Notes due 2026 at Ba2, LGD6, 94% These ratings were affirmed: -- Corporate Family Rating at Ba1 -- Probability of Default Rating at Ba1 The rating outlook is negative. Clearwater, Florida-based Tech Data Corp. is a global distributor of information technology and computer related products. THEILER SIRNACH: Thurgau Court Suspends Bankruptcy Proceedings -------------------------------------------------------------- The Bankruptcy Service of Thurgau suspended the bankruptcy proceedings of LLC Theiler Sirnach on Dec. 7, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF4,000 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on Oct. 7, can be reached at: LLC Theiler Sirnach Winterthurerstrasse 43 8370 Sirnach Thurgau Switzerland The Bankruptcy Service of Thurgau can be reached at: Bankruptcy Service of Thurgau 8510 Frauenfeld Thurgau Switzerland TSCHANZ KUCHEN: St. Gallen Court Closes Bankruptcy Proceedings -------------------------------------------------------------- The Bankruptcy Court of St. Gallen entered Nov. 2 an order closing the bankruptcy proceedings of LLC tschanz Kuchen. The Debtor can be reached at: LLC tschanz Kuchen Vogelsbergstrasse 19 9240 Uzwil St. Gallen Switzerland The Bankruptcy Service of St. Gallen can be reached at: Bankruptcy Service of St. Gallen Branch Oberuzwil Urs Ghirlanda 9242 Oberuzwil St. Gallen Switzerland UNTERSEE AUKTIONEN: Court Suspends Bankruptcy Proceedings --------------------------------------------------------- The Bankruptcy Service of Thurgau suspended the bankruptcy proceedings of JSC Untersee Auktionen on Dec. 7, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF4,000 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on Oct. 5, can be reached at: JSC Untersee Auktionen Zurcherstrasse 270 8500 Frauenfeld Thurgau Switzerland The Bankruptcy Service of Thurgau can be reached at: Bankruptcy Service of Thurgau 8510 Frauenfeld Thurgau Switzerland VERAGUTH-MOTOS LLC: Court Suspends Bankruptcy Proceedings --------------------------------------------------------- The Bankruptcy Service of Thurgau suspended the bankruptcy proceedings of LLC Veraguth-Motos on Dec. 7, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF5,000 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on Sept. 29, can be reached at: LLC Veraguth-Motos Kreuzlingerstrasse 29 8555 Mullheim Dorf Switzerland The Bankruptcy Service of Thurgau can be reached at: Bankruptcy Service of Thurgau 8510 Frauenfeld Thurgau Switzerland =========== T U R K E Y =========== HABAS SINAI: Low Leverage Prompts Fitch to Affirm B+ Ratings ------------------------------------------------------------ Fitch Ratings affirmed Turkey-based Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S.'s local and foreign currency Issuer Default ratings at 'B+' and National Long-term rating at 'A+(tur)'. The Outlooks on the ratings are Stable. The ratings reflect Habas's low leverage (FY05: 1x net debt/EBITDAR) and sound fixed charge coverage (FY05: 7x EBITDAR after capital expenditure/fixed charges). Habas benefits from its geographic proximity to the growing construction markets in the Middle East. The latter accounted for around 60% of Habas's exports in FY05, reflecting the company's strong customer base in the region. Habas has smaller scale, a narrower product portfolio and lower operating margins compared to global steel manufacturers and is fully dependent on the international scrap metal markets for its raw material supply. With the commissioning of its 240 MW power plant in 2005, Habas has become self-sufficient in its electricity needs, with the ability to sell some of its surplus capacity to the national grid. Fitch will continue to monitor the impact of Habas's in-house power generation capability and the ongoing expansion of its rolling mill capacity on its operating profitability. It will also keep a close watch on the evolution of the scrap and long- steel price cycles in the medium term. Fitch expects Habas's industrial gases business to maintain its strong leading position in the domestic market and expand its product portfolio in FY06 and FY07. Fitch will also continue to monitor the positive contribution of the industrial gases business to the overall results of Habas. Habas owns a 68% stake in Turkey-based Anadolu Bank ('B+'/Stable) with the balance held by the Basaran family, who are also controlling shareholders of Habas itself. The stake is classified as investment on Habas's balance sheet valued at TRY100 million. The bank reported YTL38 million net income in fiscal year 2005. Fitch fully factors in the potential benefits and risks associated with Habas's stake in Anadolu Bank. Established in 1956, Habas is the largest industrial and medical gases manufacturer and distributor in Turkey. The company started producing steel billets at its Aliaga electric arc furnace plant in 1987 and has added debar and wire rod to its product portfolio with a current capacity of 2.6 million tons. Habas ranks among the three largest long-steel exporters in the country. Its other activities include banking and related finance subsidiaries, liquefied petroleum gas distribution and heavy machinery engineering and sales. Habas remains a private company. VESTEL ELEKTRONIK: Sound Posture Cues Fitch to Affirm BB- Rating ---------------------------------------------------------------- Fitch Ratings affirmed Turkey-based Vestel Elektronik Sanayi ve Ticaret A.S.'s foreign and local currency Issuer Default ratings at 'BB-' (BB minus) with Stable Outlooks. The ratings reflect Vestel's sustained sound position in the European television market and growing revenues from both branded and private label products. They also reflect the company's expansion in the relatively higher-margin white goods segment both in Turkey and Russia as well as sustained geographical sales diversification. The company continues to face pricing and margin pressure in the conventional televisions and electronic consumer goods segments, continued capital expenditure and working capital requirements. Vestel has been reducing its volumes and sales in conventional televisions and electronic consumer products (mostly DVD players) since 2004 and focusing on higher-margin flat panel TVs and white goods. The Stable Outlook reflects Fitch's expectations that Vestel will be able to sustain its sales growth, primarily by volumes, and maintain its EBITDA margin at around 7% after 2006. Fitch notes that the profitability of both Vestel and Vestel Beyaz Esya Sanayi ve Ticaret A.S. deteriorated during 2005, partly due to increased competition and Vestel White's efforts to build its market share in Turkey. In 2006, however, Vestel's interim results show a marked year-on-year increase in its EBITDA margin, primarily due to the sharp depreciation of the Turkish lira in May-June 2006. The currency has stabilised at around its pre-May levels, causing the currency effect on Vestel's TRY-based revenues and cost of goods sold to dissipate by third quarter of 2006. Fitch will continue to monitor Vestel's operating profit margins in both the electronics and white goods businesses. Free cash flow was negative in fiscal year 2005 as a result of increased working capital and capacity expansion investments. Vestel had US$87 million net debt at end-2005. Free cash flow is expected to turn positive in 2006. Vestel's gross debt-to- EBITDA is expected to remain manageable at below 2.5x in 2006. Vestel Electronics Finance Ltd has two outstanding bonds, rated 'BB-'. The bonds require Vestel to remain under 4x consolidated debt/EBITDA, whereby for the purposes of bond covenants calculation, debt includes trade-related letters of credit issued for component procurement. Vestel was in compliance with the covenants of its two bonds as of H106. Vestel is a leading manufacturer of television sets with US$3.32 billion sales and US$216 million EBITDA, including US$598 million sales and US$66 million EBITDA in the white goods business in FY05. Vestel derived 72% of its sales from exports in FY05. Collar Holding BV (Netherlands), a Zorlu Group company wholly owned by Ahmet Nazif Zorlu, chairman of Zorlu Holding, has majority control in Vestel with a 51.6% stake. The remaining 48.4% of Vestel is quoted on the Istanbul Stock Exchange. Vestel conducts its white goods business via Vestel White where Vestel holds a 72.6% stake with the rest of the company quoted on the Istanbul Stock Exchange. ============= U K R A I N E ============= INDUSTRIALBANK: Fitch Lifts Junk Issuer Default Rating to B- ------------------------------------------------------------ Fitch Ratings upgraded JSCB Industrialbank's ratings to Issuer Default 'B-' from 'CCC' and to Short-term 'B' from 'C' and removed them from Rating Watch Evolving. INB's Individual rating is affirmed at 'D/E' and removed from Rating Watch Evolving and the Support rating is affirmed at '5'. A Stable Outlook is assigned to the IDR. This upgrade reflects INB's improved diversification by customer, sector and geographically following the merger with MT Bank, while the ensuing integration risk appears to have been reasonably managed. The merger should mean that the bank is better placed to expand its franchise and achieve some economies of scale, although competition remains intense. Fitch kept INB's ratings on RWE in January 2006, pending the receipt of additional information from the bank to enable it to assess the impact, if any, of the planned merger with MT Bank on INB's ratings. "While concentration levels have fallen, they remain significant on both sides of the balance sheet," says Lindsey Liddell, Director of Fitch's Financial Institutions group. "There is also still a significant degree of reliance on related-party funding. Furthermore, the merger has resulted in an increase in INB's funding and operating costs and in its level of problem loans due to the weaker asset quality of the acquired MT Bank." INB's ratings continue to reflect INB's high-risk operating environment, small size (by international standards), and moderate franchise. Although reasonable at present, INB's capitalization is set to fall due to planned growth. A further upgrade of INB's ratings is unlikely in the near term, although franchise expansion and increased diversification could contribute to an improvement in the bank's financial position, as could a proven track record of managing the risks associated with planned growth in retail and SME lending. A sharp deterioration in capitalization or asset quality, or a sharp increase in related-party lending could result in a rating downgrade. INB operates in Zaporizhzhia, south east Ukraine, one of the country's key industrial regions. In fourth quarter 2005, INB merged with MT Bank, a primarily corporate bank located in central Ukraine. At end-June 2006 the merged bank ranked among the 30-largest Ukrainian banks by total assets. INB is ultimately controlled by two private individuals who additionally hold a stake in Zaporizhstal, a large Ukrainian steel company. INB has historically been a corporate bank, to a large extent servicing related parties, but its strategy is to diversify its business and expand retail banking. UKRSIBBANK JSCIB: Fitch Assigns BB- Rating to US$500-Mln Notes -------------------------------------------------------------- Fitch Ratings assigned HSBC Bank plc's US$500 million 7.75% limited recourse loan participation notes due December 2011 a final Long-term 'BB-' (BB minus) rating. The notes are to be used solely for financing a loan to JSCIB UkrSibbank (rated Issuer Default (IDR) 'BB-'/Positive Outlook, Short-term 'B', Support '3', Individual 'D/E') under a loan agreement. HSBC only pays noteholders principal and interest, if any, received from UkrSib under the loan agreement. According to the National Bank of Ukraine, UkrSib was the third largest Ukrainian bank by assets at end-September 2006. UkrSib is a universal bank with principal activities in corporate and retail banking in Ukraine. The bank operates the fourth largest nationwide branch network, consisting of almost 1,000 outlets and points of sales in more than 180 cities and towns throughout Ukraine. A controlling 51% stake is held by France-based BNP Paribas (rated Issuer Default 'AA', Short-term 'F1+', Individual 'A/B' and Support '1'), with substantially all of the remaining 49% controlled by two Ukrainian shareholders, Oleksandr Yaroslavskyy and Ernest Galiyev, who also own a number of large industrial assets in the country's metallurgy and chemical industries. VNESHTORGBANK JSC: Eyes US$4.6 Billion Fresh Capital in 2007 IPO ---------------------------------------------------------------- JSC Vneshtorgbank aims to raise up to RUB120 billion from its planned initial public offering in 2007, Bloomberg News reports. VTB will offer to the public 20% to 22% of its total shares, which could earn around RUR90-RUR120 billion for the company, Economy Minister German Gref said in a televised government meeting. As reported in the TCR-Europe on Dec. 6, the Russian government eyes beneficial terms for initial public offerings of state- controlled banks OAO Sberbank Rossii and Vneshtorgbank. As reported, the government plans an IPO for Sberbank in the first quarter of 2007, and for Vneshtorgbank in the second quarter. Russia intends to gradually reduce its holdings in the two banks. Mr. Gref said VTB's IPO will occur in May or June 2007, after President Vladimir Putin signs the necessary decree. Bloomberg suggests that Russian banks are raising capital to boost lending as the country enters a ninth year of economic expansion and embarks on a multibillion-dollar overhaul of Soviet-era infrastructure. The need for capital will swell in 2007, thus investors are encouraged to invest in state-owned institutions like OAO Sberbank, Renaissance Capital investment bank told Bloomberg News. Sberbank is seeking to raise around US$7 billion in 2007 via a secondary share sale to raise its legal lending limit. About Vneshtorgbank Headquartered in Moscow, Russia, JSC Vneshtorgbank -- http://www.vtb.ru/-- offers a wide range of banking services and conducting operations in both Russian and international markets. As of Dec. 31, 2005, the Group had a network of 151 branches, including 55 branches of VTB, 42 branches of VTB Retail Services and 54 branches of Industry and Construction Bank, located in major Russian regions. The Group operates through three subsidiaries located in the CIS (Armenia, Georgia, Ukraine), seven subsidiaries located in Western Europe (Austria, Cyprus, Switzerland, Germany, Luxembourg, France) and Great Britain and through five representative offices located in India, Italy, China, Byelorussia and Ukraine. VNESHTORGBANK JSC: Fitch Affirms Individual Rating at C/D --------------------------------------------------------- Fitch Ratings affirmed the ratings of Russia-based JSC Vneshtorgbank and its London-, Paris- and Cyprus-based subsidiaries, respectively VTB Europe plc, VTB Bank France SA. and Russian Commercial Bank (Cyprus), at: * JSC Vneshtorgbank: -- Foreign currency Issuer Default rating: 'BBB+', Short-term foreign currency 'F2', Individual 'C/D', Support '2', National Long-term 'AAA(rus)', Local currency IDR 'BBB+'. The Outlooks on the bank's IDRs and National Long-term rating are Stable. VTB's IDRs, Short-term and Support ratings are underpinned by its majority state ownership, importance to the Russian banking system, and Fitch's view of the high probability of support from the Russian state in case of need. However, the bank's support floor continues to depend on its status, ownership and importance to the Russian banking system. Upside potential for the Individual rating is currently limited given VTB's exposure to political risk, pressured capitalization, transparency issues surrounding the bank's largest credit exposures and increasing operational and credit risks. * VTB Europe plc: -- Foreign currency IDR 'BBB', Short-term foreign currency, 'F3', Individual 'C' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. In light of VTBE's 89%-owner, VTB, which is Russia's second largest, state-owned bank, as well as the comfort letter Fitch understands that VTB has provided to the UK's Financial Services Authority in respect of VTBE (which although not legally binding provides a strong moral obligation to support VTBE), there is a high probability that support for VTBE would be forthcoming from VTB, if needed, flowing ultimately from the Russian state. Fitch does not expect an upgrade of VTBE's Individual rating in the near future. Downward movement could result from failure to offset revenue pressures, a decline in asset quality or an increase in risk appetite. * VTB Bank France SA.: -- Foreign currency IDR 'BBB', Short-term foreign currency 'F3', Individual 'C/D' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. The Issuer Default, Short-term and Support ratings of VTBF reflect Fitch's view of the high probability of support from VTB, if needed, flowing ultimately from the Russian government. This is based on VTBF's 87%- ownerhip by VTB, as well as the assurances provided by VTB to the French authorities in respect of VTBF's solvency and by the Central Bank of Russia (VTBF's former majority owner) in respect of VTBF's liquidity (up until end-2007). Fitch does not expect an upgrade of VTBF's Individual rating in the near future. However, downward movement could result from failure to offset revenue pressures or should VTB channel upstream a large amount of capital from VTBF. * Russian Commercial Bank (Cyprus): Foreign currency IDR 'BBB', Short-term foreign currency 'F3' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. RCBC's Individual rating of 'D/E' is affirmed and withdrawn. RCBC's ratings reflect the high probability of support being forthcoming from its 100% shareholder, VTB, in case of need. Under the terms of RCBC's banking license granted by the Cypriot authorities, its obligations are guaranteed by VTB in the case of RCBC being wound up. However, in light of possible timeliness issues relating to enforcement of the guarantee, and also its cross-border nature, Fitch maintains a one-notch differential between the ratings of VTB and RCBC. The withdrawal of RCBC's Individual rating reflects the extent of integration between RCBC and its parent, which makes an analysis of RCBC on a standalone basis difficult. Fitch is informed that RCBC will remain a direct subsidiary of VTB for the foreseeable future, notwithstanding the ongoing restructuring of VTB's western European subsidiaries. Founded in 1990, VTB is Russia's second-largest bank by assets and equity. Historically a corporate bank, it is also aggressively expanding its domestic small and mid-sized enterprise and retail banking operations. VTB's strategy is to become a mid-sized European bank. Following a number of acquisitions, VTB group comprises three major Russian banks, seven banks in Western Europe, including VTBE and VTBF (both acquired at end-2005) and RCBC, and four banks in CIS countries. It also has offices in Africa and plans to open new offices in Asia. VNESHTORGBANK JSC: Inks Syndicated Factoring Project with NFC ------------------------------------------------------------- JSC Vneshtorgbank and the National Factoring Company launched a Syndicated Factoring joint project. Cooperation of key players in the banking and factoring markets suggests that the parties join together their efforts to ensure expanded access of trade and manufacturing companies to high quality factoring services. Within the framework of the project, VTB and NFC will deliver joint factoring services to customers under tripartite agreements to be entered into between VTB, NFC and the customer. And VTB will be engaged in preliminary marketing, negotiating with companies interested in factoring, handling of customers so as to gather the package of documents needed for the transaction, accepting original documents and a 100% funding. In its turn, NFC will undertake to arrange sales, to offer customer consulting, to discount monetary claims, manage customer's accounts receivable and ensure safety of customers against credit risks (debtor default risks). The Commercial Factoring line of products to be offered within the framework of this project comprises financing for deferred payment deliveries under the Factoring-Finance, coverage of credit risks under the Factoring-Guarant, and receivables assessment and management under the Factoring-Signal. Partnership of the two companies which are leaders of the Russian financial market redoubles the opportunities to elaborate unique offers for the consumer both in terms of contents and quality of the services, and in terms of competitive pricing offer formation. Alliance between VTB and NFC in this project will enable the Bank to diversify the existing line of products by a comprehensive package of factoring services and at the same time to avoid costs related to any factoring infrastructure. In its turn, NFC will have access to funding and an opportunity to increase business volumes by tapping resources of the vast regional network of the VTB Group. Joint efforts of the Bank and the Company will allow the two parties to gain strong leadership in the Russian financial market, and will result in a broader popularity of the commodity lending among households. Through diversification of its activities, VTB continues expanding its range of transactions carried out in the Russian market and delivers its customers a wide range of financial instruments recognized in international banking practice. In addition to conventional banking services, VTB offers its customers cooperation with its subsidiaries and partners. To illustrate, in 2002, the Bank founded VTB-Leasing engaged in financial lease of manufacturing machinery, motor vehicles; computer, office and trade equipment; real estate and others to large- and medium-sized companies. Developing such business lines on a comprehensive basis enables Russian enterprises to open new opportunities for further growth and for an efficient finance management system. The National Factoring Company is the first independent professional factoring company in Russia holding leadership positions in the Russian market. About Vneshtorgbank Headquartered in Moscow, Russia, JSC Vneshtorgbank -- http://www.vtb.ru/-- offers a wide range of banking services and conducting operations in both Russian and international markets. As of Dec. 31, 2005, the Group had a network of 151 branches, including 55 branches of VTB, 42 branches of VTB Retail Services and 54 branches of Industry and Construction Bank, located in major Russian regions. The Group operates through three subsidiaries located in the CIS (Armenia, Georgia, Ukraine), seven subsidiaries located in Western Europe (Austria, Cyprus, Switzerland, Germany, Luxembourg, France) and Great Britain and through five representative offices located in India, Italy, China, Byelorussia and Ukraine. * * * Following the recent upgrade of the Russian sovereign foreign and local currency IDRs to BBB+ from BBB, Fitch ratings lifted Vneshtorgbank's Upgraded to foreign currency and local currency IDR to BBB+ from BBB with a Stable Outlook and Short-term to F2 from F3. Fitch also affirmed the Individual rating at C/D and Support at 2. Fitch also upgraded Vnesheconombank IDR rating to BBB+ from BBB with a Stable Outlook; and Short-term to F2 from F3. Fitch affirmed the Support rating at 2. =========================== U N I T E D K I N G D O M =========================== 1ST CALL: Appoints T. Papanicola to Liquidate Assets ---------------------------------------------------- T. Papanicola of Bond Partners LLP was appointed Liquidator of 1st Call Contractors Limited (formerly 1st Call Maintenance & Building Services Limited) on Dec. 11 for the creditors' voluntary winding-up procedure. The company can be reached at: 1st Call Contractors Limited 19 Stewart Street Wolverhampton West Midlands WV2 4JW United Kingdom Tel: 01902 829 388 Fax: 01902 826 922 ACTUANT CORP: Earns US$25.2 Million in 2006 Fourth Quarter ---------------------------------------------------------- Actuant Corporation reported record sales and earnings for its fourth quarter and fiscal year ended Aug. 31, 2006. Fourth quarter fiscal 2006 net earnings was US$25.2 million, compared to US$19.1 million for the fourth quarter of fiscal 2005. Fiscal 2006 fourth quarter results include a US$4.9 million pre-tax charge covering a portion of the company's restructuring of its European electrical business, offset by a US$5.4 million income tax benefit primarily related to the reversal of a tax valuation allowance for net operating losses. Net earnings for fiscal 2006 were US$92.6 million compared to US$71.3 million for the prior year. Fourth quarter sales increased approximately 21% to US$324.6 million compared to US$269.4 million in the prior year, driven by strong base business growth and sales from acquired businesses. Excluding foreign currency exchange rate changes and sales from acquired businesses, fourth quarter sales increased approximately 13% from the comparable prior year period. Sales for the fiscal year ended Aug. 31, 2006, were US$1.2 billion, approximately 23% higher than the US$976 million in the comparable prior year period, reflecting sales volume added through business acquisitions and strong base business growth. Excluding the impact of foreign currency rate changes and sales from acquired businesses, full year sales increased 9% year-over-year. Commenting on the results, Robert C. Arzbaecher, Chief Executive Officer, stated, "Actuant finished fiscal 2006 strongly, driving another quarter of significant year-over-year sales and earnings growth. The continued profitable growth in our industrial tools businesses, Enerpac and Hydratight, led the record results. Additionally, as expected, automotive business revenues grew 63% for the quarter on sales related to new convertible model introductions." Mr. Arzbaecher added, "We are very happy with Actuant's progress in fiscal 2006 as we continued to execute our business model to drive strong cash flow and earnings growth. Our team achieved 9% sales growth excluding currency and acquisitions, deployed approximately US$129 million in aggregate on acquisitions that strengthened our existing business, and continued to drive LEAD (Lean Enterprise Across Disciplines) and organizational competency throughout the business. Fiscal 2006's 21% EPS growth was the fifth consecutive year of EPS growth in excess of 15% since Actuant's creation through a spin-off. We were also able to convert those strong earnings into cash, generating over US$100 million of cash flow, which was again in excess of net income." Net debt at Aug. 31, 2006, was approximately US$455 million, compared to US$460 million at the beginning of the quarter. The reduction in net debt during the quarter was attributable to fourth quarter cash flow of approximately US$29 million, partially offset by the US$24 million of borrowings to fund the August 2006 Actown acquisition. Availability under the company's revolving credit facility remained strong at approximately US$170 million as of Aug. 31, 2006. Year-over-year, Actuant's fiscal 2006 fourth quarter and full fiscal year operating profit increased to US$38.2 million and US$154.1 million, respectively, including the fourth quarter European Electrical restructuring charge of US$4.9 million. Year-over-year fourth quarter operating profit margins expanded from 13.1% to 13.3%, excluding the negative impact of the restructuring charge in fiscal 2006. At Aug. 31, 2006, the company's consolidated balance sheet showed US$1.2 million in total assets, US$850,410 in total liabilities, and US$362,965 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Aug. 31, 2006, are available for free at http://researcharchives.com/t/s?1730 About Actuant Corporation Headquartered in Glendale, Wisconsin, Actuant Corp. (NYSE:ATU) -- http://www.actuant.com/-- is a diversified industrial company with operations in more than 30 countries, including Austria, Hungary, Poland, Italy, Spain, the Netherlands, France, Russia, Turkey, Germany, and the United Kingdom. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Since its creation through a spin-off in 2000, Actuant has grown its sales from USUS$482 million to over USUS$1 billion and its market capitalization from USUS$113 million to over USUS$1.5 billion. The company employs a workforce of approximately 6,000 worldwide. Actuant Corporation trades on the NYSE under the symbol ATU. * * * As reported in the Troubled Company Reporter-Europe on Oct. 24, Moody's Investors Service affirmed its Ba2 corporate family rating for Actuant Corp. ANTHRACITE EURO: Moody's Rates EUR25-Mln Class E Notes at Ba2 ------------------------------------------------------------- Moody's Investors Service assigned definitive ratings to the Notes issued by Anthracite Euro CRE CDO 2006-1 plc, the first Commercial Real Estate CDO comprised entirely of European collateral. The ratings assigned are: -- EUR142.5-million Class A Senior Floating Rate Notes due 2042: Aaa; -- EUR29-million Class B Senior Floating Rate Notes due 2042: Aa1; -- EUR48.5-million Class C Deferrable Interest Floating Rate Notes due 2042: A1; -- EUR31-million Class D Deferrable Interest Floating Rate Notes due 2042: Baa2; and -- EUR25-million Class E Deferrable Interest Floating Rate Notes due 2042: Ba2; The structure also includes an EUR66.5-million Class F Subordinated Notes due 2042, which has not been rated by Moody's. The definitive ratings address the expected loss posed to investors by the legal final maturity date of each Class of Notes. These definitive ratings are based upon: 1. An assessment of the credit quality and of the diversification of the assets to be included in the portfolio; 2. An assessment of the eligibility criteria, reinvestment criteria and portfolio limits applicable to the future additions to the portfolio; 3. The protection against losses through the subordination of the more junior classes of notes to the more senior classes of notes; 4. The expertise of Blackrock Financial Management, Inc. in the management of B, C and Mezzanine real estate loans, CMBS tranches, REOC and REIT debt; and 5. The legal and structural integrity of the transaction. Anthracite Euro CRE CDO 2006-1 p.l.c. is a managed Commercial Real Estate CDO relating to a EUR335 million portfolio of B, C and Mezzanine real estate loans, CMBS tranches, REOC and REIT debt. The portfolio will be managed by Blackrock Financial Management, Inc. Approximately 90% of the portfolio has already been acquired at the closing date and the remaining portion will be acquired during the ramp-up period. Thereafter, the portfolio of securities will be actively managed and the portfolio manager may advise the issuer to buy or sell collateral debt securities. Any addition or removal of collateral debt securities will be subject to a number of portfolio criteria. The portfolio at closing will comprise B and C real estate loans and CMBS bonds for respectively 56.6% and 36.6% of the target par amount. The underlying assets are mainly drawn from the U.K. and Germany. The collateral will be predominantly denominated in Euros, but may also consist of assets denominated in other eligible currencies such as British Pounds, Danish Crowns, Norwegian Crowns, Swedish Crowns and Swiss Francs. The FX risk related to all the non Euro assets will be hedged via perfect asset swaps with eligible counter parties. BH FURNISHERS: Names Michael C. Klenlen Liquidator -------------------------------------------------- Michael C. Klenlen of Armstrong Watson was appointed Liquidator of BH Furnishers Limited on Dec. 7 for the creditors' voluntary winding-up procedure. The company can be reached at: BH Furnishers Limited 98-100 Duke Street Whitehaven Cumbria CA287EH United Kingdom Tel: 01946 599 736 Fax: 01946 668 42 BLOCKBUSTER INC: S&P Holds Ratings & Revises Outlook to Stable -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on video rental retailer Blockbuster Inc. to stable from negative. The ratings on the Dallas-based company, including the 'B-' corporate credit rating, were affirmed. "The outlook revision is based on the company's strengthened cash flow protection measures as a result of its cost reduction efforts and lower advertising and promotional expenses," said Standard & Poor's credit analyst Diane Shand. Total debt to EBITDA declined to 5.6x in 12 months ended Sept. 30, 2006, from 8.9x, a year earlier, and EBITDA coverage of interest increased to 1.9x from 1.4x. Although cash flow protection measures are still weak, Standard & Poor's expects further improvement in the near term due to slightly better operating results and a reduction of debt by US$150 million. The company's operating margin increased to 16.7% in the first nine months of 2006, from 11.7% a year earlier. The ratings on Blockbuster reflect the risks of operating in a mature and declining video rental industry, the company's dependence on decisions made by movie studios, its thin cash flow protection measures, high leverage, and the technology risks associated with delivery of video movies to the home. Industry fundamentals for the video rental market, on which Blockbuster's profitability is heavily dependent, are weak. The company generated 71% of total sales from its movie rental business in 2005, and its domestic rental same-store sales have been weak since 2001. The company was particularly hard hit in 2005 when the rental market dropped at a double-digit rate, after steadily declining at a low-single-digit rate in the prior three years. The contraction in the rental market is attributable to the elimination of exclusive movie release rental time windows as a result of the format change to DVD from VHS, and to studios' pricing DVDs to stimulate retail sales. In response to weak rental industry dynamics, Blockbuster eliminated late fees to increase customer traffic. This move affected revenues by US$532 million and operating income by an estimated US$250 million-$300 million in 2005. In addition, the company is attempting to transform into a home entertainment store and has launched a national online and in-store rental subscription program. Standard & Poor's has concerns over whether these initiatives will revive the company's flagging rental business. BURNGREAVE COMMUNITY: Creditors Confirm Liquidator's Appointment ---------------------------------------------------------------- Creditors of Burngreave Community Action Trust confirmed on Dec. 6 the appointment of Tracy Ann Taylor of Abbey Taylor Limited as the company's Liquidator. The company can be reached at: Burngreave Community Action Trust 12 Burngreave Road Sheffield S3 9DD United Kingdom Tel: 0114 2728008 Fax: 0114 2728800 COLLINS & AIKMAN: Excl. Plan-Filing Period Intact Until Jan. 12 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan extend Collins & Aikman Corporation and its debtor-affiliates' exclusive periods to: -- file a plan of reorganization through and including deadline through and including Jan. 12, 2007; and -- solicit acceptances of the plan through and including March 14, 2007. As reported in the Troubled Company Reporter on Dec. 6, 2006, the Debtors sought for a bridge order extending their exclusive right to file a plan of reorganization and to solicit plan acceptances. The Debtors told the Honorable Steven W. Rhodes that the proposed extension is consistent with their decision to pursue a cooperative sale process to maximize the value of their estates and to save jobs. The Debtors expect the sale process to culminate with the Plan confirmation. A brief extension of the Exclusivity Periods is intended to enable the Debtors to continue the Plan process in an orderly, efficient and cost-effective manner for the benefit of all parties. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). COLLINS & AIKMAN: Seeks Plan Framework with Customers & JPMorgan ---------------------------------------------------------------- Collins & Aikman Corp. and its debtor-affiliates are pursuing a cooperative sale process, which they expect will culminate with the confirmation of a plan. In connection with this, the Debtors have worked very hard with its major customers -- including DaimlerChrysler Corporation, Ford Motor Company, General Motors Corporation and Auto Alliance International, Inc. -- and JPMorgan Chase Bank, N.A., as agent to the senior, secured prepetition lenders and as agent to the senior, secured postpetition lenders, to negotiate an agreement that will form the basis of a plan. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, New York, relates that the parties have successfully negotiated a comprehensive customer agreement that, among other things: (a) provides for a framework to facilitate the orderly sale of a majority of the Debtors' businesses with the support of JPMorgan and the Customers; (b) provides a meaningful opportunity to save thousands of jobs; (c) memorializes an agreement among the Debtors, JPMorgan and the Customers on the substantive terms of a Chapter 11 plan; and (d) provides a clear framework toward a consensual resolution and conclusion to the Debtors' highly complex cases. While the Debtors believe that the sale of their carpet & acoustics business, with its strong fundamental business operations and its consistently positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) results, will provide them with significant funds, they believe that their plastics & convertibles businesses require additional support from the Customers if the Debtors are to maximize the value of the related assets. The concessions that the Debtors are seeking from the Customers in the Customer Agreement would allow the Debtors to continue operating their Plastics & Convertibles business while, at the same time, market certain of these assets to allow them to maximize value, preserve the maximum number of jobs related to these business lines and wind down in an orderly fashion plants that are not saleable, Mr. Schrock avers. Without these concessions, however, the Debtors would have to sell assets quickly or not at all, which would undeniably diminish recoveries and create claims against the Debtors by the Customers -- for the inevitable consequential breach of the Debtors' various contracts with the Customers -- that would materially dilute the funds available for distribution to the Debtors' creditors, Mr. Schrock asserts. Moreover, if the Debtors cease operations, it likely would materially disrupt United States automobile manufacturing on a global basis and cause significant harm to the Customers, Mr. Schrock adds. Consequently, it is essential for both the Debtors and the Customers that the Debtors' plants continue to operate. The Customer Agreement will be effective as of Nov. 26, 2006. The parties agree that the Debtors will file a reorganization plan that conforms to the terms set forth in a Plan Term Sheet and is otherwise consistent with the provisions of the Customer Agreement. The parties agree to support the Plan so long as the proposed treatment of the Parties' claims, if any, under the Plan is not materially worse than the treatment set forth on the Plan Term Sheet as determined by the respective parties in their reasonable discretion; and the releases set forth on the Plan Term Sheet are in the Plan. However, nothing in the Customer Agreement will be deemed a solicitation of votes to accept the Plan, Mr. Schrock informs the U.S. Bankruptcy Court for the Eastern District of Michigan. Pursuant to the Funding Protocol and in accordance with the budget stated in the Customer Agreement: (a) from the Effective Date through the earlier of the exit date for the Plastics & Convertibles plants, or the closing date of a sale to a qualified buyer, the Supplier and each major Plastics & Convertibles Customer will pay the costs incurred in operating each of the Plastics & Convertibles Plants allocable to the production of a Customer's component parts; (b) on the Effective Date and through the cessation of production at the Plastic & Convertibles Plants, the Supplier will pay and each of the major Plastics & Convertibles Customer will fund 100% of its allocable share of the administration expenses; and (c) from the Effective Date through the earlier to occur of the cessation of production at the Plant or June 30, 2007, the Supplier will pay and each Major Plastics & Convertibles Customer will fund the 100% of its allocable share of the Supplier's estate professional fees and expenses as well as that of JPMorgan and its advisors. The "Supplier" will consist of the Debtors and its non-Debtor subsidiaries and affiliates, excluding Collins & Aikman Automotive Hermosillo, S.A. de C.V. JPMorgan consents to the Supplier's use, if the need arises, of its cash collateral in order to satisfy the Supplier's obligations to fund its allocable share of the costs. Mr. Schrock tells the Court that the Customers agree that: -- any claim arising from any rights to its repayment approved by the Court for the launch costs paid by the Customers during the Debtors' Chapter 11 case; junior secured claims, and the US$30,000,000 administrative loan, will be waived and discharged; -- any claim for cap-ex will be treated as provided by the agreements relating to the cap-ex funding and the Court order approving the agreements or as set forth in the Plan Term Sheet; -- it will not assert a claim against the Supplier in its Chapter 11 cases for special or consequential damages and the claims will be waived and discharged; -- any other administrative expense claim against the Supplier for damages, the amounts paid pursuant to the Customer Agreement, and all other special or consequential damages arising out of or in any way relating to the Supplier's inability to perform, or breach of performance, under that Customer's production and service contracts relating to the Plastics & Convertibles Plants will be waived and discharged; and -- any other claim that would otherwise have to be paid in cash in full pursuant to Section 1129(a)(9)(A) of the Bankruptcy Code under a confirmed Chapter 11 plan will be waived and discharged. Retention bonuses will be paid to certain individuals in accordance with the Customer Agreement. The Supplier will pay and the relevant Customers will fund the Retention Bonuses in accordance with the Funding Protocol. The Customers agree not to exercise any set-off or reductions against postpetition accounts payable, other than ordinary course set-offs. However, the agreement will not affect any set-offs, recoupments or reductions a Customer exercised and implemented prior to Nov. 1, 2006, against post-petition accounts payable prior to the Effective Date so long as the Supplier knew of the amount of the set-offs, recoupments or reductions based upon the Supplier's receipt of debit memoranda or other customary notification by the Customer to the Supplier. The Customers also agree to support the Supplier's efforts to sell, either as a whole or in part, to one or more qualified buyers the plants and divisions listed in the Customer Agreement. Mr. Schrock relates that a "Supplier Default" occurs if: (i) the Supplier fails to meet its obligations to continue to produce component parts at a given plant as required by the Customer Agreement, (ii) the Supplier fails to pay the obligations it has undertaken to pay in the Customer Agreement at a given plant for a reason other than the Customer's failure to fund in a timely manner, or (iii) the Supplier's secured lenders terminate the Supplier's right to use cash collateral or otherwise enforce remedies upon an occurrence of an event of default under the terms of the Supplier's loan agreements. No Supplier Default will occur due to: (a) a force majeure event, (b) lack of funding for cap-ex, tooling or launch costs, or (c) the failure of a Customer to fund under the Customer Agreement. If any of the Customers fail to fund, reimburse or pay the Supplier pursuant to the terms of the Customer Agreement, the Supplier may, but will not be obligated to, after three business days written notice to the Customer causing the "Customer Payment Failure," cease production for the Customer, which cessation will not be a Supplier Default. As part of the Customer Agreement, the parties will also sign an access agreement that provides the Customers with certain rights to take control of the Supplier's plants and facilities to produce parts if the Supplier defaults on certain obligations. Mr. Schrock maintains that the Customer Agreement provides the Debtors with numerous benefits, including: (a) allowing the Debtors to avoid a forced shut-down of their operations; (b) providing the Debtors with millions of dollars in ongoing funding; (c) reducing the Customers' administrative claims against the Debtors' estates and waiving future claims of the Customers relating to the wind-down of certain of the Debtors' operations; (d) providing the Debtors with Customer-commitments to not resource certain products; (e) providing the Debtors with a recovery that will maximize the value of the Debtors' working capital; and (f) providing the Debtors with the support of the Customers and the JPMorgan for the sale of the Debtors' businesses and a Chapter 11 plan. Accordingly, the Debtors ask the Court to approve the Customer Agreement. The Debtors also ask Judge Rhodes to conduct an expedited preliminary hearing on their request and authorize them from and after the entry of an interim order to obtain the financing provided under the Customer Agreement. The Debtors ask the Court to conduct the final hearing on their request on Jan. 11, 2007. A full text copy of the Customer Agreement is available for free at http://researcharchives.com/t/s?172a The Debtors filed under seal certain confidential exhibits to the Customer Agreement: * Exhibit B - Plastics & Convertibles Production Payments and Obligations Budget; Funding Protocol * Exhibit C - Administration Expenses and Professional Fees and Expenses Budget * Exhibit D - Retention Bonus Budget * Exhibit F - Prepetition Payables/Customer-Specific Resolution * Exhibit G - Sale Facilities & Determination Dates * Exhibit H - Administrative Expenses and Priority Claims that May be Absorbed by the Estate and Secured Lenders' Collateral * Exhibit K - Non-Participating Customer Letter * Exhibit L - Inventory Bank Build Schedule Pursuant to Section 107(d) of the Bankruptcy Code, the Debtors had sought and obtained the Court's authorization to file the Exhibits under seal. Mr. Schrock explained to Judge Rhodes that the Debtors and the Customers would be competitively disadvantaged in a sale process and in the operation of their businesses by the disclosure of the information contained in the Exhibits. Responses (a) AAI and Ford Two of the Debtors' Customers, AutoAlliance International, Inc., and Ford Motor Company, have been parties to intense negotiations regarding the Customer Agreement. Timothy A. Fusco, Esq., at Miller, Canfield, Paddock and Stone, P.L.C., in Detroit, Michigan, however, tells the Court that there are issues that need to be addressed to satisfaction before AAI and Ford can be in a position to join in the Customer Agreement. Mr. Fusco notes that the Motion was filed without AAI's and Ford's consent, with a hearing scheduled on very short notice. Moreover, according to Mr. Fusco, drafts of the Customer Agreement continue to be circulated and it is almost impossible to determine which version of the various documents is the most current one for review and comment. Both AAI and Ford do not accept the proposed Funding Protocol in its current form. If the Court is inclined to give initial approval to the Motion, any Customer Agreement should be conditional upon submission of final documents and a reasonable time for the parties to review, Mr. Fusco suggests to the Court. (b) Creditors Committee While the Official Committee of Unsecured Creditors and its professionals are extremely frustrated at the turn the Debtors' Chapter 11 cases have taken, the Committee is supportive of the concept of the Customer Agreement to the extent it will bring liquidity into the Debtors' estates to facilitate a robust sale process that will enable the Debtors to realize maximum value for their assets for the benefit of the Debtors' unsecured creditors. Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, New York, relates the Committee, however, is still in the process of reviewing and analyzing the terms of the Customer Agreement and the related relief requested by the Debtors. Thus, the Committee reserves its rights to file an objection, on any grounds, to the final approval of the Customer Agreement. Mr. Freeman states that the Committee is particularly concerned with the provisions of the Customer Agreement that contemplate global releases for the Customers. The Debtors have agreed to release all claims and causes of action against the Customers despite the Committee's views throughout the Debtors' cases that the Customers must be held accountable for their prepetition conduct; and without quantifying the value of the claims and causes of action that they have agreed to release. Since the early stages of the Debtors' cases, the Committee has been troubled by the Debtors' reluctance to prosecute potentially valuable causes of action against their Customers. The Customer Agreement has amplified the Committee's concerns in this regard as the Customer Agreement demonstrates the Debtors' willingness to waive potentially valuable claims and causes of action that they hold against the Customers, Mr. Freeman says. Accordingly, according to Mr. Freeman, in connection with the plan process, the Committee must be afforded the opportunity to investigate fully any and all claims assertable against the Customers; and the Debtors must be required to demonstrate that the releases provide a quantifiable benefit to their estates well in excess of the value of the potential causes of action against the Customers. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CORUS GROUP: Auction Looms If Buyer Remains Unnamed by Jan. 31 -------------------------------------------------------------- The contest between Tata Steel U.K. Limited and CSN Acquisitions Ltd. to acquire Corus Group Plc may turn into an auction if the company fails to name its buyer by Jan. 30, 2007, Bloomberg News reports. The Panel on Takeovers and Mergers said that it requires an auction procedure to determine Corus' buyer if the "competitive situation" between Tata Steel and CSN remains unresolved by the given date. CSN Bid As reported in the TCR-Europe on Dec. 13, CSN increased its purchase offer for Corus to US$9.6 billion or 515 pence a share, topping Tata Steel's 500 pence per share offer. Companhia Siderurgica's proposed purchase of Corus will be funded through a BP4.35 billion of debt underwritten by Barclays Plc, ING Groep NV and Goldman Sachs Group Inc., Bloomberg says, citing Chief Financial Officer Otavio Lazcano as saying. Meanwhile, Companhia Siderurgica promised to pay BP138 million to fund the deficit in the Corus Engineering Steels Pension Scheme, Bloomberg says. Also, the steelmaker will raise the contribution rate on the British Steel Pension Scheme to 12% from 10% until March 31, 2009. The company's success in acquiring Corus hinges on the unions' support, according to published reports. Tata Offer As reported in the TCR-Europe on Dec. 11, the Boards of Directors of Tata Steel Ltd. and Corus Group plc have agreed the terms of an increased recommended revised acquisition at a price of 500 pence in cash per Corus share. Under the terms of the Revised Acquisition, Corus shareholders will be entitled to receive 500 pence in cash for each Corus Share. This represents a price of 1,000 pence in cash for each Corus ADS. The terms of the Revised Acquisition value the entire existing issued and to be issued share capital of Corus at approximately GBP4.7 billion and the Revised Price represents: -- an increase of approximately 10% compared with 455 pence, being the Price under the original terms of the Acquisition; -- on an enterprise value basis, a multiple of approximately 7.5x EBITDA from continuing operations for the 12 months to Sept. 30, 2006 (excluding the non-recurring pension credit of GBP96 million) and a multiple of approximately 5.9x EBITDA from continuing operations for the year ended Dec. 31, 2005; -- a premium of approximately 38.7% to the average closing mid-market price of 360.5 pence per Corus Share for the 12 months ended Oct. 4, 2006, being the last business day before the announcement by Tata Steel that it was evaluating various opportunities including Corus; and -- a premium of approximately 22.7% to the closing mid-market price of 407.5 pence per Corus Share on Oct. 4, 2006, being the last business day before the announcement by Tata Steel that it was evaluating various opportunities Including Corus. The terms of the Revised Acquisition remain subject to the conditions and do not affect Tata Steel's intentions regarding the business of Corus, its management, employees and locations, nor the proposals relating to Corus's pension schemes, the Corus Share Schemes, Convertible Bonds or cancellation of the Deferred Shares. About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Portugal and the U.S. About Tata Steel Established in 1907, Tata Steel is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added). About Corus Group Corus Group plc, fka British Steel, was formed when the UK privatized its major steelworks in 1988. It then changed its name to Corus Group after acquiring most of Dutch rival Koninklijke Hoogovens. Corus makes coated and uncoated strip products, sections and plates, wire rod, engineering steels, and semi-finished carbon steel products. It also manufactures primary aluminum products. Customers include companies in the automotive, construction, engineering, and household-product manufacturing industries. Six years ago, the group suffered from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. * * * As reported in the TCR-Europe on Nov. 22, Standard & Poor's Ratings Services kept its 'BB' long-term corporate rating on U.K.-based steelmaker Corus Group PLC on CreditWatch with developing implications, following the announcement by Brazil- based steel maker Companhia Siderurgica Nacional (BB/Watch Neg/- -) of a proposed takeover offer worth 475 pence per share. At the same time, the 'BB+' senior secured bank loan ratings and 'BB-' unsecured debt ratings on Corus remain on CreditWatch with developing implications. The 'B' short-term corporate credit rating remains on CreditWatch with positive implications. All ratings were placed on CreditWatch on Oct. 18 following the announcement of an initial bid for the company from India-based steel manufacturer Tata Steel Ltd. In a TCR-Europe report on Oct. 25, Moody's Investors Service placed all ratings of Corus Group plc under review with direction uncertain following the recommendation of the board of Corus Group in favor of the proposed acquisition of the entire capital of Corus Group by Tata Steel Limited. Ratings affected: Corus Group plc * Ba2 Corporate Family Rating; * Ba1 Rating on EUR800 million Secured Bank Facilities maturing July 2008; * B1 Rating on EUR800 million Unsecured Notes due 2011; and * B1 Rating on GBP200 million in Unsecured Notes due 2008. Moody's last rating action on Corus was the upgrade to Ba2/Ba1/B1 on May 8. As reported in the TCR-Europe on Oct. 24, Fitch Ratings changed the Rating Watch on Corus Group PLC's Issuer Default and senior unsecured BB- and Short-term B ratings to Negative from Positive. This follows the recommendation by the CS Board of an offer from India-based Tata Steel Ltd. valued at GBP4.3 billion. The RWN also applies to these debt instruments issued by CS: -- CS EUR800 million 7.5% senior notes; -- CS EUR307 million 3% convertible bonds; and -- Corus Finance Plc GBP200 million 6.75% guaranteed bonds. Fitch will resolve the Rating Watch following publication of CS's 2006 results, further details on the level of synergies and operational benefits that could accrue under the transaction, and the closure of the deal. CORUS GROUP: Adjourns Meetings Following Regulator's Ultimatum -------------------------------------------------------------- The Directors of Corus Group Plc intend to propose resolutions to shareholders at each of the reconvened Court Meeting and Extraordinary General Meeting to be held today, Dec. 20, 2006, to adjourn the meetings until further notice. Any notice of the adjourned EGM and Court Meeting would be given as appropriate in accordance with the articles of association of the Company and the direction of the Court, respectively. Earlier, the Panel on Takeovers and Mergers announced that the last date for each of Tata and CSN to announce revised offers for the Company, should they wish to do so, is Jan. 30, 2007. The Company would therefore expect the competitive situation to be resolved, at the latest, on or shortly after that date. In relation to the Court Meeting and EGM to be held today, the Corus Directors, who have been advised by Credit Suisse, JPMorgan Cazenove and HSBC intend, assuming that the current circumstances are prevailing at that time to: -- propose resolutions to Corus Shareholders to adjourn those meetings sine die until further notice; -- recommend that Corus Shareholders vote in favor of any such adjournment resolutions; and -- exercise their discretion under any instrument appointing any of them as proxy for a Corus Shareholder at the reconvened EGM or Court Meeting so as to vote in favor of any such adjournment resolutions. If circumstances change between the time of this announcement and the times of the reconvened EGM and Court Meeting to be held today, the Board will reconsider its current intention to propose and recommend that shareholders vote in favor of adjournment resolutions and the Corus Directors will reconsider their intention as to how to vote such proxies as they may hold for Corus Shareholders thereon. Corus Shareholders who wish the discretion afforded by any existing instrument of proxy to remain in place should take no action. Unrevoked proxies will also remain valid at any adjournment of the reconvened Court Meeting or the EGM. Any Corus Shareholder who no longer wishes any existing instrument appointing a Corus Director (or any other person) as their proxy to remain in place should: -- attend and vote at the reconvened Court Meeting and/or EGM in person, in which case their proxy will not be capable of exercising their votes; -- revoke their existing proxy appointment and/or, where possible, appoint a different person as their proxy with specific instructions on how to vote on any resolutions; or -- provide different instructions to their existing proxy. About Tata Steel Established in 1907, Tata Steel is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added). About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Portugal and the U.S. About Corus Group Corus Group plc, fka British Steel, was formed when the UK privatized its major steelworks in 1988. It then changed its name to Corus Group after acquiring most of Dutch rival Koninklijke Hoogovens. Corus makes coated and uncoated strip products, sections and plates, wire rod, engineering steels, and semi-finished carbon steel products. It also manufactures primary aluminum products. Customers include companies in the automotive, construction, engineering, and household-product manufacturing industries. Six years ago, the group suffered from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. * * * As reported in the TCR-Europe on Nov. 22, Standard & Poor's Ratings Services kept its 'BB' long-term corporate rating on U.K.-based steelmaker Corus Group PLC on CreditWatch with developing implications, following the announcement by Brazil- based steel maker Companhia Siderurgica Nacional (BB/Watch Neg/- -) of a proposed takeover offer worth 475 pence per share. At the same time, the 'BB+' senior secured bank loan ratings and 'BB-' unsecured debt ratings on Corus remain on CreditWatch with developing implications. The 'B' short-term corporate credit rating remains on CreditWatch with positive implications. All ratings were placed on CreditWatch on Oct. 18 following the announcement of an initial bid for the company from India-based steel manufacturer Tata Steel Ltd. In a TCR-Europe report on Oct. 25, Moody's Investors Service placed all ratings of Corus Group plc under review with direction uncertain following the recommendation of the board of Corus Group in favor of the proposed acquisition of the entire capital of Corus Group by Tata Steel Limited. Ratings affected: Corus Group plc * Ba2 Corporate Family Rating; * Ba1 Rating on EUR800 million Secured Bank Facilities maturing July 2008; * B1 Rating on EUR800 million Unsecured Notes due 2011; and * B1 Rating on GBP200 million in Unsecured Notes due 2008. Moody's last rating action on Corus was the upgrade to Ba2/Ba1/B1 on May 8. As reported in the TCR-Europe on Oct. 24, Fitch Ratings changed the Rating Watch on Corus Group PLC's Issuer Default and senior unsecured BB- and Short-term B ratings to Negative from Positive. This follows the recommendation by the CS Board of an offer from India-based Tata Steel Ltd. valued at GBP4.3 billion. The RWN also applies to these debt instruments issued by CS: -- CS EUR800 million 7.5% senior notes; -- CS EUR307 million 3% convertible bonds; and -- Corus Finance Plc GBP200 million 6.75% guaranteed bonds. Fitch will resolve the Rating Watch following publication of CS's 2006 results, further details on the level of synergies and operational benefits that could accrue under the transaction, and the closure of the deal. EUROTUNNEL GROUP: French Court Sets Jan. 15 Plan Hearing -------------------------------------------------------- The Paris Commercial Court will convene a hearing on Jan. 15, 2007, to consider the approval of Eurotunnel Group's proposed safeguard plan to restructure the company's GBP6.2 billion debt. Emmanuel Hess and Laurent Le Guerneve, the two court-appointed administrators to Eurotunnel, have proposed that the Commercial Court approve the plan. "The Safeguard Plan... presents the merits of restructuring the debt to a level compatible with the capacity of the company to reimburse, but also presents the advantage of allowing operations to continue without modification of the levels of employement or working conditions," Messrs. Hess and Le Guerneve said. Terms of the Plan The principal elements of the proposals include: 1) the creation of a new company, Groupe Eurotunnel, which will launch an Exchange Tender Offer (ETO) to Eurotunnel's current shareholders. The shareholders will hold a minimum 13% of the equity in Groupe Eurotunnel; 2) Groupe Eurotunnel will subscribe to a new long-term loan of GBP2.840 billion (less than half of the current debt) from an international banking consortium; 3) Groupe Eurotunnel will issue GBP1.275 billion of convertible hybrid notes. The hybrid notes will be convertible over a maximum of three years and one month. Approximately 61.7% of the hybrids are redeemable by the company; and 4) current Eurotunnel shareholders, who subscribe to the ETO, will hold a minimum of 13% of the equity in Groupe Eurotunnel. They can subscribe directly to the hybrid, up to a value of GBP60 million (EUR87.7 million) and will benefit from free warrants. The redemption of hybrid notes by the company would allow them to increase their share of the equity from 13% to 67%. The plan requires shareholder acceptance of at least 60 percent. Reuters reports that some shareholder groups are trying to get a better deal. Disgruntled creditors can appeal the court's decision in other courts. "We will deal with the protests," Eurotunnel chairman and CEO Jacques Gounon was quoted by Reuters as saying. "What is important is that we have a sound and balanced plan, backed by creditors, bondholders, suppliers and staff." On Nov. 27, creditors representing 72% of the financial establishment committee voted in favor of the company's proposed safeguard-restructuring plan. The committee holds 70% of the company's GBP6.2 billion debt. The rail operator also obtained a unanimous vote by its principal suppliers, with 82.17% of bondholders also voting in favor of the plan. About Eurotunnel Headquartered in Folkestone, United Kingdom and Calais, France, Eurotunnel Group -- http://www.eurotunnel.co.uk/-- operates a fleet of 25 shuttle trains, which carry cars, coaches and trucks. It manages the infrastructure of the Channel Tunnel and receives toll revenues from train operating companies whose trains pass through the Tunnel. The British and French governments have granted Eurotunnel a concession to operate the Channel Tunnel until 2086. Company Crisis Eurotunnel's crisis began when costs to build the tunnels that connect U.K. and France started to overrun before it opened in 1994. The Iraq war followed, which didn't help as tourist traffic fell. In May 2004, Eurotunnel appointed Lazard (global coordinator) and Lehman Brothers as bank advisors, and Dresdner Kleinwort Wasserstein as restructuring adviser. In July 2004, auditor KPMG Audit Plc said the company faced uncertainty after 2005. The firm's survival is dependent upon its ability to put in place a refinancing plan or, if not, to obtain an agreement with the lenders under the existing Credit Agreement within the next two years, the auditor said. Eurotunnel obtained Aug. 2 an order placing the channel operator under the protection of the Court pursuant to the new safeguard legislation (Procedure de sauvegarde). GEO GROUP: Modifies Financing Plan for CentraCore Purchase ---------------------------------------------------------- The GEO Group Inc. has modified its planned method of financing the acquisition of CentraCore Properties Trust. Geo Group will no longer be seeking to amend the indenture for its outstanding 8-1/4% senior unsecured notes, as reported on Nov. 16, 2006. In addition, GEO Group does not at the present time intend to proceed with the previously announced private placement of US$275 million in senior secured notes through a bankruptcy- remote subsidiary. Instead, GEO Group plans to finance the CPT transaction through approximately US$365 million in increased borrowings under an amended senior secured credit facility and approximately US$50 million in cash on hand. After further consideration, GEO Group believes that this method of financing the acquisition reduces execution risk and provides GEO Group with increased operational flexibility on a going forward basis. GEO Group has received a firm commitment from BNP Paribas to finance the amended senior secured credit facility. Based in Boca Raton, Florida, The GEO Group, Inc. (NYSE: GEO) delivers correctional, detention and residential treatment services to federal, state and local government agencies around the globe. GEO has government clients in the USA, Australia, South Africa, Canada and the United Kingdom. GEO Group's worldwide operations include 62 correctional and residential treatment facilities, with a total design capacity of approximately 52,000 beds. * * * On Sept. 26, 2006, Moody's Investors Service affirmed GEO Group's Ba3 corporate family and senior secured debt ratings, with a stable outlook. The rating agency also affirmed GEO Group's B1 senior unsecured debt rating. GEO Group is planning to acquire CentraCore Properties Trust in a debt-financed transaction. CentraCore, a REIT, is GEO Group's main landlord. REFCO INC: Plan Satisfies 13 Steps for Confirmation, Court Rules ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York confirmed Refco, Inc., and its debtor-affiliates' Modified Joint Chapter 11 Plan on Dec. 15, 2006. Marc S. Kirschner, the Chapter 11 Trustee for Refco Capital Markets, Ltd.; and the Official Committee of Unsecured Creditors and the Additional Committee are co-proponents of the Plan. Plan Satisfies 16 Steps Toward Confirmation Judge Drain finds that the Plan satisfies the 16 statutory requirements necessary to confirm a plan pursuant to Section 1129 of the Bankruptcy Code: A. The Plan complies with the applicable provisions of Section 1129(a)(l), which encompasses the requirements of Sections 1122 and 1123 governing classification of claims and interests and contents of the Plan. The Plan provides for (i) the impairment of certain classes of claims and interests, while leaving others unimpaired, hence modifying the rights of certain holders of claims and interests and leaving the rights of others unaffected, and (ii) the assumption and assignment or rejection of executory contracts and unexpired leases to which the Debtors are parties. In addition, in accordance with Section 1123(b)(6), the Plan includes additional appropriate provisions that are consistent with applicable provisions of the Bankruptcy Code, including, but not limited to: * the Plan provisions governing distributions on account of Allowed Claims; * the Plan provisions establishing that confirmation will not discharge claims against the Debtors; * the preservation of rights of action and the creation of the Litigation Trust to pursue the Contributed Claims; * the disposition of executory contracts and unexpired leases; * retention of jurisdiction by the Court over certain matters after the Plan Effective Date; and * the means for implementation of the Plan. B. Refco has complied with the Section 1129(a)(2) requirements regarding solicitation of acceptances of the Plan. Judge Drain concludes that the impact of the proposed settlement between the Plan Proponents and the Ad Hoc Committee of Equity Security Holders on those Classes that were solicited to vote is not "material" or "adverse" enough to warrant re-solicitation. Judge Drain notes that no value was attributed to the Litigation Trust Interests in the original Disclosure Statement. Any speculation as to the value of those interests was expressly disavowed by the Plan's liquidation analysis. As a result, none of the Claimholders in Classes receiving Tranche A Litigation Trust Interests could possibly have predicated its vote for the Plan on a precise estimate of the value of its Litigation Trust recovery. C. The Plan has been proposed in good faith, with the legitimate and honest purposes of maximizing the value of the Debtors' estates and the recovery to Claimholders. The Plan also provides for the distribution of the Debtors' assets and the wind-down of the Debtors' corporate affairs. Accordingly, the Plan complies with Section 1129(a)(3). D. Any payment made or to be made by the Plan Proponents, or by a person issuing securities or acquiring property under the Plan, for services or for costs and expenses in or in connection with the Debtors' Chapter 11 case, or in connection with the Plan and incident to the Debtors' case, has been approved by, or is subject to the approval of, the Court as reasonable, thereby satisfying Section 1129(a)(4). Pursuant to interim application procedures established under Section 331, the Court has authorized and approved the payment of certain fees and expenses of professionals in the Debtors' cases, which fees remain subject to final review by a fee committee and the Court for reasonableness. E. The manner of selection of (i) a Plan administrator, who will be the sole officer and director or manager, as applicable, of the Reorganized Debtors, and (ii) an RCM Trustee -- as the party responsible for the administration of the RCM estate -- is appropriate. Accordingly, the selection process satisfies Section 1129(a)(5) because the Plan Administrator will be appointed by the Joint Sub-Committee, and the RCM Trustee was appointed by Court order. The RCM Trustee is to wind down the RCM Estate in accordance with the RCM Settlement Agreement. F. The Plan satisfies Section 1129(a)(6) because it does not provide for any change in rates over which a governmental regulatory commission has jurisdiction. G. In accordance with Section 1129(a)(7), the Plan satisfies the "best interests" test as to each Class of Impaired Claims and Interests because the estimated Plan recovery percentage for all creditors is not less than, and in most cases greater than, recoveries under a hypothetical Chapter 7 liquidation. H. Holders of Class 7 Subordinated Claims against one or more of the Contributing Debtors and Class 8 Old Equity Interests, Holders of Class 7 FXA Subordinated Claims against FXA and Holders of Class 9 RCM Subordinated Claims against RCM are deemed to have rejected the Plan because they are not entitled to receive or retain any Distribution or property under the Plan on account of their Claims or Interests. Holders of FXA Class 5(a) Claims voted to reject the Plan. Although Section 1129(a)(8) has not been satisfied with respect to FXA Class 5(a) and the Rejecting Classes, the Plan is confirmable because the Plan satisfies Section 1129(b) with respect to those Classes. Section 1129(b) provides that the Court may cram down a plan over a dissenting vote of impaired classes of Claims or Interests as long as a plan does not "discriminate unfairly" and is "fair and equitable" with respect to the dissenting class. Judge Drain holds that the Plan Proponents presented uncontroverted evidence at the Confirmation Hearing that the Plan does not discriminate unfairly and is fair and equitable with respect to the Rejecting Classes as required by the "cramdown" requirements of Section 1129(b)(1). Accordingly, Judge Drain says, upon Confirmation and the occurrence of the Effective Date, the Plan will be binding upon the members of the Rejecting Classes and FXA Class 5(a). I. The Plan meets the requirements under Section 1129(a)(9) because it provides for: (1) payment by the Debtors of Administrative Claims, in full, in cash; (2) payment of the unpaid portion of the Non-Tax Priority Claims in full, in cash; (3) each Allowed Priority Tax Claimholder to receive: * cash equal to the unpaid portion of the Allowed Priority Tax Claim; * treatment in any other manner such that the Allowed Priority Tax Claims will not be impaired pursuant to Section 1124; or * other treatment as agreed upon in writing. J. At least one Class of Claims against each Debtor has voted to accept the Plan. Judge Drain notes that: (a) all impaired voting Classes have voted to accept the Plan with respect to each of the Contributing Debtors; (b) Classes 4 and 6 have voted to accept the Plan with respect to Refco F/X Associates, LLC; and (c) all impaired voting Classes have voted to accept the Plan with respect to RCM. Accordingly, the requirement under Section 1129(a)(10) has been met. K. The Plan is feasible and meets the requirements of Section 1129(a)(11) because it includes a means for liquidating a debtor's property. L. All fees payable under 28 U.S.C. Section 1930 have been paid or will be paid on the Effective Date, thereby satisfying Section 1129(a)(12). M. Under the Plan, all benefit plans, policies and programs of the Debtors applicable to their retirees and the retirees of its subsidiaries are treated as executory contracts that are subject to rejection. Accordingly, the requirements of Section 1129(a)(13) are satisfied. N. Refco is not required by a judicial or administrative order, or by statute, to pay a domestic support obligation. Section 1129(a)(14) is, therefore, inapplicable. 0. Refco is not an individual, and accordingly, Section 1129(a)(15) is inapplicable. P. Refco is a moneyed, business, or commercial corporation, and Section 1129(a)(16) is, thus, inapplicable. A full-text copy of the Court's Findings of Fact, Conclusions of Law, and Order Confirming the Modified Joint Chapter 11 Plan is available at no charge at http://researcharchives.com/t/s?174e Admin. Claims Bar Date Set Unless previously paid before the Plan's Confirmation Date, all requests for payment of Administrative Claims against all Debtors and RCM that were not previously filed must be submitted no later than 30 days after the Effective Date or be forever barred. The Reorganized Debtors and the RCM Trustee will have until the later of (i) 60 days after the Effective Date or (ii) 30 days after the filing of the Administrative Claim, to object to those claims. RCM Case Conversion Judge Drain finds that if RCM's Chapter 11 case is converted to a Chapter 7 case, all aspects of the Plan relating to RCM, including all settlements, compromises and releases, will nonetheless be and remain binding with full force and effect as a settlement between the RCM Chapter 7 estate and the Debtors' estates. The Plan Effective Date will constitute the effective date of the settlement between the RCM Chapter 7 estate and the Estates of other Debtors. The conversion of RCM's Chapter 11 case before the Effective Date will not impair the Effective Date occurring with respect to the other Debtors. Other Plan Provisions Are Approved Judge Drain rules that the remaining property of the Debtors' estates, other than the Contributed Claims, which will be transferred to and vest in the Litigation Trust, will not revest in the Debtors or RCM on or following the Confirmation Date or Effective Date, but will remain property of the Estates and continue to be subject to the Court's jurisdiction until distributed to Allowed Claimholders. The Court also appoints RJM LLC, a New Jersey Limited Liability Company, as the Plan Administrator. RJM was designated by the Joint Subcommittee. In the event that, after the Effective Date RJM determines that it is appropriate, each of the Affiliate Debtors will be dissolved or merged with and into Refco Inc., with the parent company as the surviving entity. The Affiliate Debtors and FXA -- until they are wound up and potentially merged with and into Refco -- will continue to exist as Reorganized Refco, Reorganized FXA or the applicable Reorganized Affiliate Debtor, after the Effective Date. On the Effective Date, all executory contracts or unexpired leases of the Debtors will be deemed rejected in accordance with Sections 365 and 1123. Moreover, Judge Drain rules that on the Effective Date, the Reorganized Debtors and Post-Confirmation RCM will fund a segregated bank account consisting of 110% of: (x) the amount of any holdbacks on previously billed and paid amounts, provided, however, that the 10% holdback of fees is released and may be remitted to certain professionals; and (y) the amount of estimated additional fees and expenses expected to be incurred by each Professional through the Effective Date. All settlements of disputes embodied in the Plan are approved as fair, equitable, reasonable and in the best interests of the Debtors, the Reorganized Debtors and their estates. Notwithstanding the transfer of claims to the Litigation Trust, Judge Drain clarifies that the claims will not be merged into a single entity, but will be deemed asserted on behalf of each applicable Estate holding that claim immediately prior to contribution, and will remain separate and distinct from other Estates in connection with the prosecution. Pursuant to Section 1123(b)(3), Judge Drain approves the Plan Proponents' appointment of Mr. Kirschner as Litigation Trustee to represent each of the Estates. The Litigation Trustee will be deemed the successor-in-interest to each of the Contributing Debtors, FXA, and the RCM Trustee. In addition, Mr. Kirschner will also act as trustee in the Private Actions Trust to hold certain claims and causes of action against third parties owned by holders of Claims or Interests against RCM or the Debtors, and which claims, even after contribution, are not assets of the Estates. Court Addresses Confirmation Objections Judge Drain rules that all Plan confirmation objections that have not been withdrawn, waived, or settled are overruled on the merits. (1) Director and Officer Indemnification Objections Judge Drain says timely filed Claims arising in favor of present or former officers or directors under contract, statute, or entity governance documents of any of the Debtors, will entitled to be asserted against the estate of each and every Debtor to the same extent as provided for under applicable law. Nothing in the Plan or Confirmation Order will (i) permit Officer and Director Claims to be treated as Subordinated Claims or otherwise subordinated, or (ii) be construed to prevent present or former directors and officers of the Debtors from seeking and obtaining coverage and payments from insurance policies of Refco Inc. or from insurance policies of any other Refco Entity. (2) New York Financial and Hillier Capital Objections Judge Drain directs RCM to transfer to the FXA Estate US$2,000,000 on the Effective Date to settle the dispute. Judge Drain also directs the Plan Administrator to form a committee of FXA customers who did not do business with FXA in Japan to oversee and direct the litigation involving FXA assets in Japan. New York Financial will serve as the chair of the committee; Hillier Capital is appointed as member of that committee. Judge Drain says the Non-Japan FXA Customer Committee will have consent rights with respect to any settlement regarding the litigation involving FXA assets in Japan. Furthermore, all reasonable expenses born in connection with the role of chair of the Non-Japan FXA Customer Committee will be born by the FXA Estate. New York Financial and Hillier Capital are granted an Allowed Administrative Expense Claim against the FXA Estate pursuant to Section 503(b) in an aggregate collective amount not to exceed US$200,000. (3) West Loop Objection Judge Drain notes that West Loop Associates, LLC, will be paid US$3,750,000 in cash by the Refco LLC estate on or before the Effective Date. West Loop will release all claims against the Debtors and against Refco LLC. In addition, West Loop will be barred from bringing any action against any third party as to the potential matters set forth in the Plan. However, West Loop will expressly retain all rights to bring actions against Mark Goodman & Associates; 550 West Jackson Associates Limited Liability Company; Mark Goodman; Phillip R. Bennett; Santo Maggio; and Grant Thornton. The Court grants West Loop a US$20,000,000 Claim against Refco Group Ltd. The Claim will be satisfied in full by distribution of the Litigation Trust Interests allocable to the Claim. However, Judge Drain says, all Litigation Trust Interests distributable on account of West Loop's Allowed Claim will be deemed to have been assigned by West Loop to the Contributing Debtors for distribution to Holders of Allowed Contributing Debtors General Unsecured Claims. The Contributing Debtors will transfer US$1,875,000 from Contributing Debtors Cash Distribution to the RCM Trustee for addition to the RCM Cash Distribution. (4) Securities Plaintiff Objection Judge Drain clarifies that nothing in the Plan or the Confirmation Order will be deemed to release, enjoin or bar any claims or the prosecution of any claims asserted in In re Refco Securities Litigation, Case No. 05-civ-8626 (SDNY), against: -- any of the Secured Lender Releasees that acted as an underwriter, book running manager or initial purchaser in connection with the underwriting, offering, distribution, or sale of the 9% Senior Subordinated Notes due 2012 issued by certain of the Debtors or of any equity securities of Refco Inc., with respect to any act or failure to act by any Secured Lender Releasee; and -- other non-Debtor defendants in the Securities Litigation, except the Released Parties identified in the Plan, the Contributing Non-Debtor Affiliates, and the Contributing Non-Debtor Affiliate Management, to the extent that the Lead Plaintiffs or the putative class members receive a distribution under the Modified Plan. (5) FXCM Objection Judge Drain also clarifies that nothing in the Plan will impair the right of FXCM Sellers from arguing that they are entitled to an equitable remedy of rescission of RGL's purchase of the FXCM Equity Stake. However, any action seeking that remedy will be heard by the Bankruptcy Court unless it has permitted the FXCM Sellers to bring that action in a different forum. Allocation of BAWAG Proceeds The Court authorizes the Debtors to utilize the BAWAG P.S.K. Bank fur Arbeit und Wirtschaft und Osterreichische Postsparkasse Aktiengesellschaft Proceeds in accordance with the Plan and the BAWAG Allocation Order. The BAWAG Proceeds may be used to pay the obligations owing to RCM under the Cash Management Advance Agreement dated Oct. 16, 2006, and to implement the other Distributions contemplated in the Plan. For purposes of making Cash Distributions, the BAWAG Contingent Proceeds will be used to satisfy the Senior Subordinated Note Distribution to the extent the funds are available to the Estates prior to the payment in full of the Senior Subordinated Note Distribution. About Refco Inc. Based in New York, Refco Inc. (OTC: RFXCQ) -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. On Oct. 6, 2006, the Debtors filed their Amended Plan and Disclosure Statement. On Oct. 16, 2006, the gave its tentative approval on the Disclosure Statement and on Oct. 20, 2006, the Court Clerk entered the written disclosure statement order. The hearing to consider confirmation of Refco, Inc., and its debtor-affiliates' plan is set for Dec. 15, 2006. Objections to the plan, if any, must be in by Dec. 1, 2006. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). SEVERSTAL OAO: Gains RUR24.8 Billion from New Share Issue --------------------------------------------------------- OAO Severstal has completed the placement of its additional shares, RosBusinessConsulting reports. The company raised around RUR24.83 billion after placing a total of 76,916,692 shares at RUR322.81 per share. Company shareholders exercised their pre-emptive rights to acquire 90.49% of the additional share issue. Severstal was unable to sell its shares to other buyers at RUR332.74, RBC relates. About Severstal Headquartered in Cherepovets, Russia, OAO Severstal -- http://www.severstal.com/-- is the country's largest steel producer, with steel production of 17.1 million tons in 2005. The Company owns Severstal North America, the fifth largest integrated steel maker in the U.S. with 2005 production of 2.7 million tons, and Lucchini, Italy's second largest steel group with 2005 production of 3.5 million tons. Severstal is one of the world's lowest cost and most profitable steel producers, with 2005 EBITDA per ton of around EUR150 per ton. As of Dec. 31, 2005, Severstal had US$10.75 billion in total assets, US$3.66 billion in total liabilities and US$7.09 billion in total shareholders' equity. * * * As reported in the TCR-Europe on July 5, Standard & Poor's Ratings Services kept its 'B+' long-term corporate credit rating on Russian steelmaker OAO Severstal on CreditWatch with positive implications following the consolidation of the company's mining assets. The rating was placed on CreditWatch on May 26, following the announcement of a previously agreed merger between Severstal and Luxembourg-based steelmaker Arcelor S.A. This merger was cancelled on June 30. As reported in the TCR-Europe on June 28, Fitch Ratings maintained the Rating Watch Positive status for OAO Severstal's ratings of Issuer Default BB-, senior unsecured BB-, Short-term B and National Long-term A+. Severstal, which recently raised just over US$1 billion placing shares in London, plans to acquire more assets on the way to becoming the world's second-largest steel maker, its 41-year-old billionaire owner, Alexei Mordashov, has said. SEVERSTAL OAO: Appoints Five Non-Executive Directors to Board ------------------------------------------------------------- OAO Severstal disclosed that all the resolutions were passed at the company's Dec. 15 Extraordinary General Meeting, including those in relation to the appointments to the Board of Directors. These appointments are made as part of Severstal's new corporate governance arrangements designed to comply with the key elements of the U.K.'s corporate governance standards. Following these appointments, Severstal will have a 10-person Board. Five Executive Directors: -- Alexey Mordashov, -- Mikhail Noskov, -- Vadim Makhov, -- Anatoliy Kruchinin, and -- Vadim Shvetsov. Five Independent Non-Executive Directors: -- Chris Clark, Independent Director and Non-executive Chairman of the Board; -- Martin Angle, Independent Director; -- Rolf Stomberg, Senior Independent Director; -- Ron Freeman, Independent Director; and -- Dr Peter Kraljic, Independent Director. The first meeting of the Board of Directors was held immediately after the Extraordinary General Meeting. The Board of Directors has elected Chris Clark as the Chairman of the Board and appointed Chairmen and members of Audit and Remuneration committees. About Severstal Headquartered in Cherepovets, Russia, OAO Severstal -- http://www.severstal.com/-- is the country's largest steel producer, with steel production of 17.1 million tons in 2005. The Company owns Severstal North America, the fifth largest integrated steel maker in the U.S. with 2005 production of 2.7 million tons, and Lucchini, Italy's second largest steel group with 2005 production of 3.5 million tons. Severstal is one of the world's lowest cost and most profitable steel producers, with 2005 EBITDA per ton of around EUR150 per ton. As of Dec. 31, 2005, Severstal had US$10.75 billion in total assets, US$3.66 billion in total liabilities and US$7.09 billion in total shareholders' equity. * * * As reported in the TCR-Europe on July 5, Standard & Poor's Ratings Services kept its 'B+' long-term corporate credit rating on Russian steelmaker OAO Severstal on CreditWatch with positive implications following the consolidation of the company's mining assets. The rating was placed on CreditWatch on May 26, following the announcement of a previously agreed merger between Severstal and Luxembourg-based steelmaker Arcelor S.A. This merger was cancelled on June 30. As reported in the TCR-Europe on June 28, Fitch Ratings maintained the Rating Watch Positive status for OAO Severstal's ratings of Issuer Default BB-, senior unsecured BB-, Short-term B and National Long-term A+. SITEL CORPORATION: Earns US$7.4 Million in 2006 Second Quarter -------------------------------------------------------------- Sitel Corp. reported US$7.4 million of net income on US$278.3 million of revenues for the quarter ended June 30, 2006, compared with US$2.6 million of net income on US$251.8 million of revenues for the same period in 2005. Revenue increased US$26.5 million, mainly due to the US$23.7 million increase in European revenue and the US$4.3 million increase in Latin America revenue, offset by a US$1.4 million decrease in Asia Pacific revenue. North American revenue in the first quarter of 2006 remained consistent compared to the same period in 2005. A decrease of US$24.3 million of revenue resulting from the loss of General Motors was offset by US$24.2 million of revenue growth primarily in customer acquisition, technical support and risk management. The weakening of the U.S. dollar versus the Canadian dollar resulted in US$600,000 of the increase. European revenue increased US$23.7 million for the three months ended June 30, 2006, compared to the same period in 2005. Higher sales volumes from new and existing clients resulted in an increase in revenue of US$24.2 million for the three months ended June 30, 2006, compared to the same period in 2005. The strengthening of the U.S. dollar versus the British pound and Euro partially offset this increase by US$500,000. Latin America revenue increased US$4.3 million for the three months ended June 30, 2006, compared to the same period in 2005. Higher sales volumes from new and existing clients resulted in an increase in revenue of US$3.4 million, while the weakening of the US dollar versus the Brazilian Real resulted in the remaining US$900,000 of the increase. Asia Pacific revenue decreased US$1.4 million for the three months ended June 30, 2006, compared to the same period in 2005. Lower sales volumes with existing clients resulted in a decrease in revenue of US$300,000, while the strengthening of the U.S. dollar versus the New Zealand and Australian dollars resulted in the remaining US$1.1 million of the decrease. The US$4.8 million increase in net income is primarily due to the US$26.5 million increase in revenues, the US$6 million gain on settlement with a business partner, the US$1.1 million decrease in interest expense, the US$1.3 million increase in equity in earnings of affiliates, and the US$549,000 increase in other income, offset by the US$28.4 million increase in operating expenses(excluding the effects of the US$6 million settlement gain). The increase in operating expenses is primarily due to the US$25.1 million increase in direct labor and telecommunications expense. Interest expense decreased US$1.1 million or 34.0% due to a gain of US$1.4 million for a reduction in interest on a Brazil tax obligation being recorded as a reduction of these expenses. This gain was partially offset by higher amortization of debt acquisition costs. Equity in earnings of affiliates increased US$1.3 million for the three months ended June 30, 2006, compared to the same period in 2005 primarily due to the US$1.2 million in insurance proceeds received by the company's India joint venture related to flood damage in 2005. Other income increased primarily as a result of fluctuations in foreign currency re-measurement gains arising from monetary assets and liabilities denominated in currencies other than a business unit's functional currency. The increase in direct labor and telecommunications expense was primarily the result of higher ramp-up costs of new client programs, particularly in Europe, and a change in the mix of services provided in the three months ended June 30, 2006, compared to the same period in 2005. At June 30, 2006, the company's balance sheet showed US$429.2 million in total assets, US$288.5 million in total liabilities, US$5.8 million in minority interests, and US$134.9 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2006, are available for free at http://researcharchives.com/t/s?1733 Merger Agreement with ClientLogic Corp. On Oct. 13, 2006, the company and ClientLogic Corporation disclosed that they have signed a definitive merger agreement. Under the terms of the agreement, a newly formed subsidiary of ClientLogic will merge with the company and pay US$4.05 per share in cash for all of the outstanding common stock of the company. The board of directors of each company has unanimously approved the transaction. The transaction is expected to be completed in the first quarter of 2007 and is subject to customary closing conditions, including approval of the company's shareholders and regulatory clearances. The company's board of directors has recommended to its shareholders that they vote in favor of the transaction. About Sitel Corp. Sitel Corp. (NYSE:SWW) -- http://www.sitel.com/-- provides outsourced customer support services. On behalf of many of the world's leading organizations, SITEL designs and improves customer contact models across its clients' customer acquisition, retention and development cycles. SITEL manages approximately two million customer interactions per day via the telephone, e-mail, Internet and traditional mail. SITEL has over 42,000 employees in 101 global contact centers, utilizing more than 32 languages and dialects to serve customers in 56 countries including Argentina, Denmark, Panama, Philippines, and the United Kingdom, among others. * * * Sitel Corp. carries Standard & Poor's Rating Services 'B' corporate credit rating. TRIPLE BLACK: Brings In Joint Liquidators from Ashcrofts -------------------------------------------------------- Harjinder Johal and George Michael of Ashcrofts were appointed Joint Liquidators of Triple Black Limited on Dec. 12 for the creditors' voluntary winding-up proceeding. Ashcrofts -- http://www.ashcrofts.net/-- offers hands on expertise specializing in Business Recovery and Insolvency providing positive solutions for negative situations. UMANO JEWELLERY: Taps Liquidator from BN Jackson Norton ------------------------------------------------------- Shirley Angela Jackson of BN Jackson Norton was appointed Liquidator of Umano Jewellery Limited on Dec. 12 for the creditors' voluntary winding-up proceeding. The company can be reached at: Umano Jewellery Limited 86 Avondale Road Bromley Kent BR1 4EZ United Kingdom Tel: 020 8402 2205 VTB EUROPE: Fitch Affirms Individual Rating at C ------------------------------------------------ Fitch Ratings affirmed the ratings of Russia-based JSC Vneshtorgbank and its London-, Paris- and Cyprus-based subsidiaries, respectively VTB Europe plc, VTB Bank France SA. and Russian Commercial Bank (Cyprus), at: * JSC Vneshtorgbank: -- Foreign currency Issuer Default rating: 'BBB+', Short-term foreign currency 'F2', Individual 'C/D', Support '2', National Long-term 'AAA(rus)', Local currency IDR 'BBB+'. The Outlooks on the bank's IDRs and National Long-term rating are Stable. VTB's IDRs, Short-term and Support ratings are underpinned by its majority state ownership, importance to the Russian banking system, and Fitch's view of the high probability of support from the Russian state in case of need. However, the bank's support floor continues to depend on its status, ownership and importance to the Russian banking system. Upside potential for the Individual rating is currently limited given VTB's exposure to political risk, pressured capitalization, transparency issues surrounding the bank's largest credit exposures and increasing operational and credit risks. * VTB Europe plc: -- Foreign currency IDR 'BBB', Short-term foreign currency, 'F3', Individual 'C' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. In light of VTBE's 89%-owner, VTB, which is Russia's second largest, state-owned bank, as well as the comfort letter Fitch understands that VTB has provided to the UK's Financial Services Authority in respect of VTBE (which although not legally binding provides a strong moral obligation to support VTBE), there is a high probability that support for VTBE would be forthcoming from VTB, if needed, flowing ultimately from the Russian state. Fitch does not expect an upgrade of VTBE's Individual rating in the near future. Downward movement could result from failure to offset revenue pressures, a decline in asset quality or an increase in risk appetite. * VTB Bank France SA.: -- Foreign currency IDR 'BBB', Short-term foreign currency 'F3', Individual 'C/D' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. The Issuer Default, Short-term and Support ratings of VTBF reflect Fitch's view of the high probability of support from VTB, if needed, flowing ultimately from the Russian government. This is based on VTBF's 87%- ownerhip by VTB, as well as the assurances provided by VTB to the French authorities in respect of VTBF's solvency and by the Central Bank of Russia (VTBF's former majority owner) in respect of VTBF's liquidity (up until end-2007). Fitch does not expect an upgrade of VTBF's Individual rating in the near future. However, downward movement could result from failure to offset revenue pressures or should VTB channel upstream a large amount of capital from VTBF. * Russian Commercial Bank (Cyprus): Foreign currency IDR 'BBB', Short-term foreign currency 'F3' and Support '2'. The Outlook on the bank's IDR is Stable mirroring that assigned to VTB's IDR. RCBC's Individual rating of 'D/E' is affirmed and withdrawn. RCBC's ratings reflect the high probability of support being forthcoming from its 100% shareholder, VTB, in case of need. Under the terms of RCBC's banking license granted by the Cypriot authorities, its obligations are guaranteed by VTB in the case of RCBC being wound up. However, in light of possible timeliness issues relating to enforcement of the guarantee, and also its cross-border nature, Fitch maintains a one-notch differential between the ratings of VTB and RCBC. The withdrawal of RCBC's Individual rating reflects the extent of integration between RCBC and its parent, which makes an analysis of RCBC on a standalone basis difficult. Fitch is informed that RCBC will remain a direct subsidiary of VTB for the foreseeable future, notwithstanding the ongoing restructuring of VTB's western European subsidiaries. Founded in 1990, VTB is Russia's second-largest bank by assets and equity. Historically a corporate bank, it is also aggressively expanding its domestic small and mid-sized enterprise and retail banking operations. VTB's strategy is to become a mid-sized European bank. Following a number of acquisitions, VTB group comprises three major Russian banks, seven banks in Western Europe, including VTBE and VTBF (both acquired at end-2005) and RCBC, and four banks in CIS countries. It also has offices in Africa and plans to open new offices in Asia. * Fitch Says European Car Makers Better Positioned than US Peers ---------------------------------------------------------------- Fitch Ratings says European manufacturers enjoy stronger credit profiles and higher ratings than their U.S. counterparts but remains concerned that the downtrend in the U.S. may be replicated in Europe. Although the outlook for the auto industry is stable in Europe, this stability is fragile. The main common themes and differences between the western European and U.S. automotive industries are reviewed in a special report issued this week. "Many of the issues faced by U.S. manufacturers are not present in Europe, or at least not to the same extent," says Emmanuel Bulle, Director in Fitch's European Industrials team. "Not only do the European and U.S. markets differ structurally but European manufacturers have also reacted more quickly than their U.S. counterparts to increasing industry challenges, implementing the necessary restructuring measures." The first structural difference is that Western Europe is a highly fragmented market, whereas U.S. brands still account for the majority of sales in their domestic market. As a result, European original equipment manufacturers have had to adapt their marketing, sales and industrial strategies to a multi- player environment. European manufacturers serve various countries with different cycles, helping to mitigate the auto industry cyclicality, while U.S. groups will immediately suffer from a sales slump in their national market. Ford, GM and to a lesser extent DaimlerChrysler's Chrysler, are also heavily burdened by legacy issues. Healthcare and pension liabilities put the U.S. groups at a significant disadvantage to foreign competitors. This situation has been aggravated by the deteriorating relationship between the U.S. Big Three and their suppliers. In contrast, European OEMs globally enjoy better relations with their suppliers and benefit from lower stress in the global supply chain. Fitch notes that some of the issues facing U.S. and European OEMs, including aggressive and increasing competition from Asian brands, and the need to cut costs and delocalize production, were first present in the US. European manufacturers were therefore able to see the extent of the challenge and react accordingly. As a result of these historical, structural and strategic differences, European manufacturers are now better positioned than their U.S. counterparts, with stronger cash generation and higher operating margins. Nevertheless, Fitch views that the weakening of the U.S. auto industry is a strong indication that continuous efforts are needed in Europe. Fierce competition, high raw material prices, unfavorable foreign exchange rates and European regulations remain challenges. In particular, Fitch expects competition from Asian players to continue unabated. The offensive by Japanese and Korean brands may have started in the U.S. but is becoming protracted in WE. The deterioration in the Big Six's market shares in Europe since the end of import quotas in 2001 demonstrates the pressure being put on domestic players by Asian manufacturers. Fitch expects Asian brands to accelerate their market share growth as they develop diesel technology and as consumer acceptance of Asian brands increases. Fitch will comment further on the outlook for the European auto industry in January 2007. ********* Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Jazel Laureno, Julybien Atadero, Carmel Zamesa Paderog, Joy Agravante, and Zora Jayda Zerrudo Sala, Editors. Copyright 2006. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *